The affordable abode agenda


The SPV to implement Prime Minister Dato’ Sri Mohd. Najib Tun Razak’s targeted policy of affordable housing to the middle income and urban dwellers, Perumahan Rakyat 1 Malaysia Bhd. (PR1MA), would be organising an exposition this weekend.

It is part of their gearing up, to get more of the target group to expect on the offerings that would be made for the middle income and urban dwellers, in major metropolitan areas.

As part of the Government Transformation Plan (GTP) to serve the dwellings for middle income earners (categorised between RM2,500-RM10,000 per month) in strategic urban areas, to be able to afford housing (RM100,000-400,000 per units band).


The middle income lot, are the most adversely affected in propulsion of rapid growth of the economy particularly in the urban areas. Properties are getting way out of their affordability and this gap is widening.

Hence, Prime Minister Najib intended to address the problem by the creation of PR1MA through the PR1MA Act (2012), for the SPV to acquire lands formerly belonging to Federal Government and State Government agencies, to be developed for a small margin.

This is to ensure these units are more affordable, compared to similar products if it were to be developed by private developers, which are motivated on profits.

PR1MA expects to deliver 10,000 units by next year. There are 65,000 units under work in progress and so far, the PR1MA has already approved 227,000 units for development is the various working relationship established.

That is not to bad after all. When it was first started, they aimed for 80,000 units per annum to be sorted out and developed.

As announced in Prime Minister’s Bajet 2016 speech, the program is being intensified:

Utusan Malaysia story:

PR1MA perlu kerjasama pemaju swasta bina 175,000 unit rumah

29 Oktober 2015 12:52 AM

PETALING JAYA 28 Okt. – Perbadanan PR1MA Malaysia (PR1MA) memerlukan lebih banyak kerjasama daripada pemaju swasta bagi membina 175,000 unit rumah mampu milik pada tahun hadapan seperti yang diumumkan Perdana Menteri, Datuk Seri Najib Tun Razak dalam Bajet 2016.
Ketua Pegawai Eksekutifnya, Datuk Abdul Mutalib Alias berkata, pada masa ini PR1MA memerlukan kawasan seluas 1,740 hektar bagi menyempurnakan projek berkenaan dan diharapkan menerusi kerjasama tersebut masalah ini dapat diatasi.
“Isu tanah adalah isu utama dalam pembinaan rumah. Tanah yang diberikan kerajaan Persekutuan agak terhad dan hendak mendapatkan tanah daripada kerajaan negeri juga sukar dari segi prosesnya.
“Sebab itu, kita alu-alukan kerjasama daripada pihak pemaju swasta kerana mereka ini sudah ada tanah. Bagaimanapun mereka perlulah memenuhi spesifikasi yang ditetapkan PR1MA iaitu unit rumah yang hendak ditawarkan mestilah antara 20 dan 30 peratus lebih rendah daripada harga pasaran,” katanya dalam taklimat mengenai Ekspo Rumah PR1MA 2015, di sini hari ini.
Menurut Abdul Mutalib, kerjasama dengan pemaju swasta itu juga dilihat dapat mengatasi permintaan tinggi orang ramai terhadap rumah PR1MA.
Beliau berkata, ketika ini terdapat kira-kira 1.05 juta pemohon berdaftar untuk mendapatkan 198,489 unit rumah PR1MA yang sedang dan akan dibina di seluruh negara.
“Daripada jumlah itu, 6,172 unit terletak di Kuala Lumpur dengan 4,636 unit sedang dalam proses pembinaan.
“Sebanyak 19,591 unit pula terletak di sekitar Selangor dengan 5,081 dalam pembinaan diikuti 560 unit di Putrajaya,” ujarnya.
Dalam pada itu, beliau berkata, PR1MA akan mengadakan Ekspo Rumah PR1MA 2015 di Pusat Perdagangan Antarabangsa Melaka (MITC), Melaka selama tiga hari bermula 30 Oktober ini.
“Ekspo ini merupakan sebahagian daripada siri jelajah untuk memberikan maklumat interaktif me­ngenai produk dan perkhidmatan kami kepada orang ramai,” katanya.
– See more at:


When PR1MA first started, the deliverable set was 80,000 units per annum. The BoD of PR1MA, which comprises a mixture of top civil servants and some corporate leaders, upheld the deliverable.

Currently, there are 190 projects running simultaneously to deliver all the targeted 240,00 homes within the next three years and the same for the next corresponding period.

Published in: on November 24, 2015 at 12:01  Comments (2)  

Bad act of failed bastardisation

Nazir Razak's comment on social media about 1MDB alleged fees to Goldman Sachs

Nazir Razak’s comment on social media about 1MDB alleged fees to Goldman Sachs

CIMB Chairman Dato’ Seri Nazir Razak has been caught with his pants down again on another failed act of bastardisation, in his sordid rhetoric attempt to portray an adversarial position against the reality. This time, on the alleged fees paid by 1MDB for commecial papers issued and raising of funds.

The Star story:

Published: Sunday November 15, 2015 MYT 8:22:00 PM
Updated: Sunday November 15, 2015 MYT 8:54:25 PM

Nazir Razak removes Instagram post on inaccurate headline



PETALING JAYA: Datuk Seri Nazir Razak (pic) has removed an Instagram post based on an inaccurate headline published by The Malaysian Insider regarding 1Malaysia Development Berhad (1MDB) after the news portal amended its previous heading.

“Note that I have removed previous post because TMI (The Malaysian Insider) corrected its article about what 1MDB CEO said,” according to Nazir in an Instagram post Sunday.

The Malaysian Insider had initially placed their headline as “RM5 billion Goldman Sachs fees over five years, says 1MDB boss” before changing their headline to “RM5 billion costs for debts over 5 years, says 1MDB boss”.

“So, it was not the anticipated disclosure of total fees paid to GS (Goldman Sachs) – guess we still have to wait for PAC/AG report,” said Nazir.

“This is important for a full understanding of what transpired and how we go forwards,” he added.

1MDB president Arul Kanda Kandasamy provided a detailed briefing on 1MDB at the Forum Perdana in the Putra World Trade Centre on Saturday.

In a statement, 1MDB said that the briefing was open to all Malaysians and was covered by various media organisations including alternative media.

However, 1MDB noted the inaccurate headline by The Malaysian Insider that has been “widely and wrongly circulated in an Instagram posting that appears to have originated from one Dato’ Sri Nazir Razak”.


1MDB Group Executive Director and President Arul Kanda’s media conference on Malaysia Insider’s story based on Nazir’s social media comment:


Media statement by 1Malaysia Development Berhad

Issued on 14 November 2015
For immediate publication

Clarification: Forum Perdana on 14 November 2015

At the Forum Perdana in PWTC earlier today, Arul Kanda, the President & Group Executive Officer of 1MDB, provided a detailed briefing on 1MDB and replied without reservation to various pointed and pertinent questions raised by the audience. This briefing was open to all Malaysians and covered by various media organisations, including alternative media.

1MDB regrets to note that one wrong headline relating to financial costs by The Malaysian Insider (which was subsequently corrected),  appears to have been widely and wrongly circulated, including in an Instagram posting that appears to have originated from one Dato’ Sri Nazir Razak.

Further, 1MDB notes that a number of online news portals and certain bloggers have in the course of today raised queries relating to the Brazen Sky fund unit redemptions, which was another topic covered at the briefing.

1MDB repeats below, clarifications that have previously been issued on both matters, to reiterate the facts of the matter.

1.      Financial Costs

1MDB had previously published a table (which was shared again at the Forum Perdana today), showing the use of its RM42 billion of debt. In this table, there is a line item “Financial Costs” with a total of RM5.8 billion, between the years 2009-2014. The vast majority of this cost relates to interest payments, for example, RM2.4 billion in 2013-2014 and RM1.6 billion in 2012-2013. The remainder of the costs comprise interest between 2009 and2012, working capital costs, amortised fees, foreign exchange costs and tax paid by the company’s energy subsidiaries.

2.      Fund Unit Redemptions

As of 31 March 2014, the fund units in a Cayman registered fund, owned by 1MDB subsidiary Brazen Sky, were valued at US$2.33 billion.  On 5 November 2014, at the time 1MDB’s financial statements for the year ended 31 March 2014 were published, an amount of approximately US$1.22 billion had been redeemed, in cash, with proceeds being substantially utilised for debt interest payment, working capital and payments to Aabar as refundable deposits for options termination.

On 14 and 24 November 2014, approximately US$170 million of the fund units were redeemed, in cash. Accordingly, approx. US$1.4 billion of fund units were redeemed, in cash, leaving a balance of approximately US$940 million in fund units.

On 2 January 2015, a final redemption of approximately US$940 million was undertaken through a sale of fund units to Aabar, with cash payment being deferred. This 2 January fund unit sale agreement was subsequently superceded (i.e. replaced) by the Binding Term Sheet that was signed on 27 May 2015 between 1MDB and IPIC, the “AA” rated parent of Aabar, upon which a payment of US$1 billion was made by IPIC to 1MDB.

1MDB has previously stated, and reiterates, that the remaining US$940 million of fund units will form part of the US$ cash deposits and US$ fund unit assets to be transferred by 1MDB to IPIC, for the “debt for asset swap”, in which IPIC will then take over 1MDB debt of approximately  RM 16 billion.


The said screen shots on the pro-Anwarista news portal, which were amended in fear of repercussion of lying or false reporting again.


The earlier screen captures of the story in various versions:


The pro-Anwarista stories, which were done suspiciously done to mislead and cause the further confusion, in the strategy to demonise Prime Minister Dato’ Sri Mohd. Najib Tun Razak’s administration.

The ‘revised story’:

RM5 billion costs for debts over 5 years, says 1MDB boss


Published: 14 November 2015 12:56 PM | Updated: 14 November 2015 8:45 PM


Arul Kanda said that the financial charges grew in tandem with 1MDB’s debts.

“The RM5 billion was over give years, it is not the cost of one year,” he said during a briefing session organised by Umno earlier today.
He was asked earlier why the financial charges were high and amounted to more than 10% of the total debt.
“When we started out, the debt was not immediately RM42 billion. So the higher the debt got, the financial charges increased.”

He denied that the financial charges were 10% as claimed.

“For 2014, the financial charges were RM2.4 billion. This was included in the overall RM5 billion figure. Hence, it is not 10%.”

Arul Kanda said 1MDB’s debts would be reduced significantly by year-end. – November 14, 2015.

* Editor’s note: This report has been corrected after clarification from 1Malaysia Development Berhad president Arul Kanda Kandasamy

– See more at:


The only reason the pro-Anwarista changed its stories is because to avoid legal action. The writers should not be reminded of their advertisements made in mainstream media four years ago.

Then it is baffling on this round of instagram statement by Nazir. We are not sure why he raised about the alleged RM5 billion fees paid to Goldman Sachs for various work the New York based investment bank did for 1MDB.

However, it is more than fair to assume that Nazir as the Chairman of BoD, former Group CEO of CIMB and a career investment banker (who managed to bring up CIMB from a merchant bank to the takeover the parent banking group), would have access to better information such as the subject matter than many other persons.

Nazir isn’t a novice at the faux pax game against 1MDB. Then again, the occurrence of these shooting-from-the-hip (mostly via social media account) is too bloody frequent from a respected banking chief executive, to be a mere faux pas.

A professional don’t usually take pot shots or clown on things like this. More over, the Chairman of banking group which is a GLC (government like company) stature.

It suspiciously looked like it is part of the game to demonise 1MDB.

The Star story:

Published: Monday June 29, 2015 MYT 6:38:00 PM
Updated: Monday June 29, 2015 MYT 7:10:49 PM

Nazir Razak ‘seeking the truth’ on Instagram

Screen Shot 2015-11-15 at 10.59.26 PM


PETALING JAYA: A cryptic photo expressing hope that Malaysians will soon get the “truth” they have been deprived of has been posted by Datuk Seri Nazir Razak (pic) on his Instagram account.

Posting an image of a sign board bearing the words, “Truth. Next exit”, the CIMB group chairman wrote; “I hope so. Our institutions must get us there quickly. Malaysians feeling truth-deprived, depressing and divisive. After truth we can find reconciliation,” he said without elaborating further.

The posting on Monday afternoon had received more than 200 likes two hours later.

Nazir, who is the younger brother of Prime Minister Datuk Seri Najib Razak, has been actively speaking out on the 1Malaysia Development Berhad (1MDB) controversy.

In May, he had slammed 1MDB’s top executives for failing to turn up for the Public Accounts Committee hearing.

He also previously questioned the state investment arm’s lateness in beginning its March 2015 audit.

More recently, Nazir has been linked with the setting up of a new non-governmental organisation with like-minded individuals such as Global Movement of Moderates chief executive officer Datuk Saifuddin Abdullah over concerns regarding Malaysia’s present socio-political landscape.


and more of them:

The Star story:

Published: Tuesday May 26, 2015 MYT 10:37:00 AM
Updated: Tuesday May 26, 2015 MYT 4:18:49 PM

Nazir Razak slams 1MDB board on Instagram


PETALING JAYA: It is unacceptable that 1Malaysia Development Berhad (1MDB)’s top executives are unable to attend the Public Accounts Committee (PAC) inquiry, says Datuk Seri Nazir Razak (pic).

In a post on Instagram on Tuesday, Nazir, the younger brother of Prime Minister Datuk Seri Najib Tun Razak, slammed 1MDB’s president and group executive director Arul Kanda Kandasamy as well as its former CEO Datuk Shahrol Azral Ibrahim Halmi for not being able to attend the PAC inquiry.

The CIMB group chairman had posted a picture of the front page of a financial news daily with the comment: “Your company has triggered a national crisis and you can be too busy to face Parliament? Unacceptable.”

On Monday, the PAC set a new date for Arul and Shahrol to appear.

The two have sought a month’s extension before they face the committee, which had been set to meet them on Tuesday.

The PAC was notified by the Finance Ministry that Arul and Shahrol were unable to attend as they were away on official business.

PAC chairman Datuk Nur Jazlan Mohamed told the media on Monday, “They requested 30 days … We may give them less.”


Otherwise, he is out to be part of the strategy to demonise his own eldest brother.

The Malay Mail Online story:

Put country and people before self, Nazir Razak urges

Monday July 6, 2015
08:22 AM GMT+8
The CIMB Group chairman who is also Prime Minister Datuk Seri Najib Razak’s brother, Datuk Seri Nazir Razak (pic), sent the message via the Instagram photo-sharing service as a caption to the image of the national monument. — Reuters pic
KUALA LUMPUR, July 6 — The prime minister’s brother, Datuk Seri Nazir Razak, yesterday made a plea to unnamed individuals to put the country’s interests before their own during these “dark political times”.

The CIMB Group chairman and avid social media commentator sent the message via the Instagram photo-sharing service as a caption to the image of the national monument.

“They gave their lives so we could build a nation. In this darkest of political times we must remember to place the country & the rakyat first.

“Not personal interests, not personal loyalties, not even party politics,” he wrote.

Nazir did not identify the intended recipients of his message.

A screen capture showing Datuk Seri Nazir Razak's instagram post.

A screen capture showing Datuk Seri Nazir Razak’s instagram post.

The brother to Prime Minister Datuk Seri Najib Razak has in recent months been an outspoken figure on the topic of corporate governance, regularly criticising 1 Malaysia Development Bhd (1MDB) over what he considers shortcomings in the manner they conduct their affairs.

1MDB is under investigation by at least four federal agencies.

The latest development in the 1MDB controversy is an allegation by the Wall Street Journal that US$700 million (RM2.6 billion) of the firm’s funds were wired into the prime minister’s personal accounts.

Najib denied the report and said he will take legal action against the US newspaper tomorrow.

– See more at:


All these one-way-street jibes from the Chairman and former Group CEO of the second largest Malaysian banking group is really bad for perception. Be it politically, corporate or even for average man on the street.

If Nazir as a person who is aloof and incoherent on what effects social media statements brought forth the strategic consideration, then probably he or his good office hire consultants to look into the matter.

A damning IG statement by a Chairman of a GLC banking group

A damning IG statement by a Chairman of a GLC banking group

It is important to note that CIMB is part of Khazanah Nasional Bhd (Khazanah)., the Federal Government corporation which holds the investment and strategically manages strategic GLCs. Prime Minister Najib is the Chairman of Khazanah.

This attitude and actions by Nazir is intolerable. If Nazir is not supportive of some of the Federal Government policies and has issues of retaining his personal opinion of some of these matters in the public domain, then he should leave the Khazanah Group.

There is already a precedence within the CIMB Group.

The Star story:

Published: Tuesday July 14, 2015 MYT 6:49:00 PM
Updated: Tuesday July 14, 2015 MYT 7:04:39 PM

CIMB Islamic Bank chief Badlisyah resigns

KUALA LUMPUR: CIMB Islamic Bank chief executive officer Badlisyah Abdul Ghani (pic), who is facing an internal probe for his Facebook posting on banking documents released by the Wall Street Journal (WSJ), has resigned.

In a filing with Bursa Malaysia, CIMB Group Holdings Bhd said his resignation as CEO and board member would be effective Aug 15.

CIMB in a statement Tuesday said CIMB Islamic Bank’s board had elected Mohd Shafri Shahul Hamid as person-in-charge of the bank and the group nomination and remuneration committee will start the process to identify the next CEO for the bank.

CIMB Islamic Bank board chairman Datuk Dr Syed Muhammad Syed A. Kadir said; “We respect Badlisyah’s decision. Since his appointment in 2006, Badlisyah has strengthened our global Islamic banking franchise and we are now well positioned globally to tackle the challenges and opportunities ahead of us. The board and I are grateful to Badlisyah for his leadership, integrity and contribution to the group. We wish him well for the future and the next stage in his career.”

Badlisyah had cast doubts on the authenticity of the documents WSJ used for its reports on 1Malaysia Development Bhd (1MDB).

He subsequently released a statement admitting his analysis was wrong and that the views expressed on his Facebook page were strictly his personal opinion.

CIMB group chairman Datuk Seri Nazir Razak later said in an Instagram posting that Badlisyah should not have commented on the documents as it was a technical matter and an internal inquiry had been ordered on the matter.

Badlisyah, who is also Association of Islamic Banking Institutions Malaysia president, claimed that the bank document said to be from a Wells Fargo Bank N.A. branch in New York was not authentic as it bore the wrong Swift code. A Swift code is a code that helps overseas banks identify which bank to send money to.

Earlier this month, WSJ had published an article quoting an “unnamed investigator” that claimed almost US$700mil (RM2.63bil) of 1MDB funds were channelled into Datuk Seri Najib Razak’s personal accounts. Najib’s lawyers then sent a clarification demand to the board of directors of Dow Jones and Company Inc, which publishes WSJ.


Nazir shouldn’t needed to be reminded that it was reported about his comment on Badlisyah’s Facebook posting. Unless, the CIMB Chairman could convince Khazanah, CIMB Group BoD and the public at large that the instagram account isn’t his personal social media account, it was cloned or hijacked or “@nazir.razak” is not him.

He should be able to differentiate his expected obligations as part of the upper echelon within the Khazanah Group from his personal opinion, position and/or stance, even as the perspective of a trained banker. More over, he has very direct blood relations to the Chairman of Khazanah.

The IG of the pseudo politician, banker supremo

The IG of the pseudo politician, banker supremo

It is shameful that he does not respect this. Nor, when all these could be aggregated and permute to the perception of his consistent attempts to bastardise, especially when his damming statements are not even correct in facts and the context.

Even and unless Nazir actually has a dark and hidden political ambition. It is apt with his remarkably reflecting politically-styled statements more befitting and echoing in the tones of notable Opposition politicians, namely Anwar Ibrahim, Tony Pua and Rafizi Rahim.

*Updated 2245hrs

Published in: on November 15, 2015 at 21:00  Comments (6)  

The strategy to preserve strategic interest of the nation

It has now reached the cross road about the strategy of the preservation of the strategic interest of the nation, with the decision to retain Edra Global Energy Bhd. within the control of Malaysians or allow foreigners to inch their way in, as part of the 1MDB ‘Rationalisation Plan’.

The Star story:

Thursday, 5 November 2015

Qatar’s Nebras-CGN tie-up said vying with TNB for 1MDB power arm

The overseas bidders had expressed willingness to pay a higher price for the state investment company’s Edra Global Energy Bhd unit than Tenaga Nasional Bhd (TNB), the people said, asking not to be identified as the negotiations were private.

State-controlled TNB is wary of overpaying because it needed to justify any acquisition to shareholders, one person said. (File pic shows one of the power stations owned by the unit.)

The overseas bidders had expressed willingness to pay a higher price for the state investment company’s Edra Global Energy Bhd unit than Tenaga Nasional Bhd (TNB), the people said, asking not to be identified as the negotiations were private.

State-controlled TNB is wary of overpaying because it needed to justify any acquisition to shareholders, one person said. (File pic shows one of the power stations owned by the unit.)

KUALA LUMPUR: Qatar’s Nebras Power QSC is in talks to partner with China General Nuclear Power Corp (CGN) in the bidding for 1Malaysia Development Bhd’s power business, people with knowledge of the matter said, potentially pitting a foreign consortium against Malaysia’s biggest listed energy producer.

The overseas bidders had expressed willingness to pay a higher price for the state investment company’s Edra Global Energy Bhd unit than Tenaga Nasional Bhd (TNB), the people said, asking not to be identified as the negotiations were private.

State-controlled TNB is wary of overpaying because it needed to justify any acquisition to shareholders, one person said. 1MDB, the debt-ridden state investment company that almost defaulted earlier this year, expects RM16bil to RM18bil for the power plants and has received bids close to that figure, president Arul Kanda said Oct 31.

The sale is part of 1MDB’s plan to wind down its operations after it drew criticism from lawmakers for rising borrowings that totalled RM41.9bil as of March 2014.

Foreign investors are normally only allowed to own as much as 49% of Malaysian power producers unless they obtain a waiver as the Government provides gas to electricity plants at subsidised prices.

It’s not yet clear whether foreign bidders for 1MDB’s power plants will be able to obtain an exemption, according to the people. State-owned CGN entered the bidding after its Hong Kong-based clean-energy arm CGN Meiya Power Holdings Co decided not to pursue an offer, according to the people.

A preferred bidder was expected to be chosen this month, two of the people said.

1MDB, whose advisory board is headed by Prime Minister Datuk Seri Najib Tun Razak, has said it expected to enter into a definitive agreement with the winning bidder before year-end.

It said “value maximisation” and “deal certainty” would be among the factors that would guide its decision. 1MDB “is bound by confidentiality” and can’t comment further at this time, it said in an e-mailed statement.

The Energy, Green Technology and Water Ministry didn’t immediately respond to an e-mail seeking comment. A spokesman for China General Nuclear declined to comment, while a representative for its main listed unit, CGN Power Co, didn’t immediately respond to a request for comment. R

epresentatives for Nebras and its controlling shareholder, Qatar Electricity & Water Co, didn’t respond to requests for comment.

TNB, which last month reported that its fourth-quarter profit fell almost 40%, has said its ownership of the 1MDB power plants would ensure “continuing Malaysian control” of those “strategic” assets.

It said 1MDB’s assets would enhance its earnings and cash flow by boosting its domestic power generation capacity and broadening its global presence. 1MDB owns a net generation capacity of 5,594 MW and is the largest independent power producer in Bangladesh and Egypt, according to its website.

Besides investments in plants in Pakistan and the United Arab Emirates, it has 3,112 MW of capacity in Malaysia, making it the nation’s biggest independent power producer after Malakoff Corp. – Bloomberg


It seems that China General Nuclear Power Corp (CGN) has teamed up with Qatar Nebras Power QSC (Nebras), to take on TNB for Edra Energy’s 13 power plants which include five in Malaysia. Intially, CGN through CGN Meiya and Nebras submitted separate bids for Edra Energy.

However, CGN Meiya announced to the Hong Kong bourse that it withdrew and CGN the parent corporation would do the bidding instead.

The Federal Government which is wholly own 1MDB, the parent company of Edra Energy would be the final decision maker. Is the consideration is tactical, which is to settle part of 1MDB’s RM42 billion exposure to financial commitments through various commercial issued or something more strategic than that.

It is without doubt that 1MDB’s financial woes started when the initial plan of the listing of Edra Energy originally slotted about two years ago after a series of acquisition and consolidation of independent power plants (IPPs), did not materialise. So when it was shifted.

As such 1MDB had been laden with the financial commitments to service the borrowings with RM2.4 billion in cash annually.

The Star story:

Published: Saturday October 31, 2015 MYT 2:16:00 PM Updated: Saturday October 31, 2015 MYT 2:45:35 PM

Arul: Failed Edra IPO led to 1MDB’s troubles


KUALA LUMPUR: A failed listing exercise for 1Malaysia Development Bhd’s (1MDB) energy assets last year is the main contributor to the firm’s present financial difficulties, said its chief Arul Kanda Kandasamy Saturday.

According to Arul, 1MDB had two targeted dates in which to list the assets, which are now held under its power unit Edra Global Energy Bhd. The first was in November 2013 and another date was set for November last year.

“In both circumstances, for various reasons including internal and external factors, the initial public offering (IPO) did not happen,” he told reporters during a press conference in Kuala Lumpur.

When the IPO failed to materialise, a mismatch arose between the interest charges that needed to be repaid in the short term as well as principal payments, Arul explained.

“That is my answer as to why 1MDB is facing the difficulty and challenges that we are going through today,” he said. Without reducing its current debt load of RM42bil, the cost of servicing the interest on the debt amounts to RM2.4bil per annum, he said.

Arul said that 1MDB plans to get reduce the entirety of this debt by June next year via a series of rationalisation exercises.

The sale of Edra to interested bidders, which is currently ongoing, is expected to reduce between RM16bil to RM20bil in debt from its books. With three bidders submitting final binding proposals, he said that 1MDB is currently negotiating a sale and purchase agreement while the counterparties are conducting due diligence prior to submitting a final offer. “

We expect this to happen in the next two or three weeks,” he said.


Whether or not 1MDB could realise what it expected to get from the initially planned IPO two years should be as strategically important as what the outcome would affect Malaysians, now and in the future.

First and foremost, the capital market is no longer the level it used to be. The very least is the value of Ringgit Malaysia against the greenbacks, which is never about economic fundamentals nor the normal mechanism of foreign exchange.

Cutting loses now and realise it later with other 1MDB projects such as TRX and Bandar Malaysia, could make economic sense unless the consideration also include the political elements and pandering to pressures.

Just like about the part fallacy to pressure for TH to retain the 68,000 sq. ft. parcel for premium residential plot with TRX.

It has believed that TNB’s offer Edra Energy is RM14billion against the newly formed 100% foreign consortium of Qatar Nebras and CGN, at RM17.1billion.

The Edge Markets story:

TNB puts in lowest bid for Edra

By Kamarul Anwar / The Edge Financial Daily |

November 5, 2015 : 8:50 AM MYT

This article first appeared in The Edge Financial Daily, on November 5, 2015.

KUALA LUMPUR: Tenaga Nasional Bhd (TNB) has put in the lowest bid for the equity of 1Malaysia Development Bhd’s (1MDB) energy arm Edra Global Energy Bhd at slightly above RM8 billion, according to sources familiar with the matter.

The national utility company’s bid is understood to be about 20% lower than the closest competing bid from a foreign consortium, giving the latter an advantage over TNB to win the tender to buy Edra.

The competing bid, which values the equity in Edra at less than RM10 billion, was jointly submitted by a consortium consisting of China’s state-owned company China General Nuclear Power Corp Ltd (CGNPC) and Qatar’s Nebras Power QSC, sources told The Edge Financial Daily.

The two parties had initially come in as separate bidders. With an estimated net debt of RM8.5 billion in Edra’s books, the bids would place an enterprise value of between RM16.5 billion and RM18.5 billion for the energy unit.

1MDB president and chief executive director Arul Kanda Kandasamy previously said that Edra’s assets are valued at between RM15 billion and RM20 billion.

Note that the bidding prices may change slightly, as the final binding bidding deadline for Edra is tomorrow.

Price alone might not be the determining factor as foreign parties are limited to a maximum of 49% equity in local power assets.

However, it has been reported that the foreign bidders are applying to the government to remove the restriction and allow 100% acquisition of Edra’s Malaysian power assets. When contacted, a TNB spokesman declined to confirm the price the company had bid for Edra.

“We are [in] the midst of conducting the confirmatory due diligence process before the final deadline on Friday (tomorrow) for all bidders,” the spokesman said.

TNB president and chief executive officer Datuk Seri Azman Mohd in October said that being the sole offtaker of all power generated in Malaysia, TNB is the best and most logical buyer of Edra’s assets.

Yet, as the 1MDB drama has been a thorny issue among Malaysians, putting in a higher figure could make TNB look like it is bailing out the cash-strapped, debt-ridden 1MDB. Both these entities have a common shareholder which is the Ministry of Finance.

At about RM8 billion, TNB’s bid would meet the ceiling price that PKR’s vice-president and secretary-general Rafizi Ramli wants the government to put a cap on TNB’s purchase of Edra.

The opposition lawmaker yesterday filed a motion in the Parliament to cap TNB’s purchase of Edra at RM8 billion, claiming that it is the market value for Edra’s stable of power plants locally and abroad.

Looking at TNB’s balance sheet as at Aug 31, the utility giant had short-term borrowings of RM1.96 billion and long-term borrowings of RM22.71 billion — against shareholders’ fund of RM47.21 billion. Deducting the cash in hand worth RM2.47 billion, its net gearing level stood at 0.47 times.

In a hypothetical scenario where TNB buys Edra’s assets at RM16.5 billion (paying RM8 billion for the equity while assuming RM8.5 billion in liabilities) by using all the cash it has and borrowings for the rest, TNB’s net debt would amount to RM38.73 billion.

This is equivalent to 0.82 times its equity. With the ringgit still being Asia’s worst-performing currency and having weakened against the US dollar by 21.98% year to date, this would make Edra’s power assets relatively cheap for the CGNPC-Nebras joint venture to acquire.

Combining their balance sheets would also give them more financial muscle to make their bid. Edra has 13 power assets in its current stable, with eight of them located abroad — plus the right to build a 2,000mw gas power plant in Melaka.

In July, TNB (valuation: 1.20; fundamental: 1.30) purchased a 70% stake in Edra’s Jimah East Power Sdn Bhd, the owner of two undeveloped 1,000mw coal-fired power plants better known as Track 3B, for RM46.98 million.


TNB’s offer is made after a due diligence was made and the consideration is about what Khazanah, EPF and KWAP agreed with the consideration on what the shareholders would be willing to fork out for the 13 IPPs, which include 8 abroad.

That is not withstanding that the value is in Ringgit Malaysia unlike Nebras-CGN, is on US Dollars. TNB prepared its budget based on Ringgit Malaysia where else the foreign parties, made their bids on USD. When the bidding process started, USD was at the level of RM3.55 and their original bid of USD3.8b naturally would get prominence since at their end, it did not cost them any extra.

The shrinking of RM against USD automatically placed TNB’s position to be disadvantaged for added the value of the consideration offered by the after-thought foreign consortium, deemed more favourable.

Then again, the beauty contest should be more than just cash.

Second, 1MDB should consider Malaysian first. Edra Energy to be foreign owned means 75% of the value of the group, would be owned and controlled by foreign parties despite on five out of the thirteen IPPs are in Malaysia.

The proposal for Edra Energy is wholesome, which means that would open the doors of the Nebras-CGN to be a player in the Malaysian power production game.

5,590MW is not a small consideration for the Malaysian Government to ignore. It comprises about 47% of TNB’s current production in Semenanjung. Instead of having all that under control of Malaysians, the consideration for power security would change tremendously if Edra Energy is 100% foreign owned and controlled.

Third, the control of Edra Energy would just be a door opener for more acquisition by Nebras-CGN, part there of or related corporations to start to offer other IPPs to be foreign controlled too. That is eroding the strategic position of power security for the nation.

It is also believed that Ministry of Finance is supporting the notion that a special provision of exemption of the national energy policy be allowed for the 100% ownership and control of IPPs. Currently, it is at 49%.

TNB Capex

TNB Capex

Fourth point is that acquisition of Edra Energy is factored into TNB’s strategic development in the form of capital expenditure (capex), where the shareholders decided of RM6-8 billion capex per annum within five years.

This acquisition would increase TNB’s current long term gearing ratio against total asset of 35% to between 40-45%. This below the power generation corporation around the region, which is between 60-70%.

It is also interesting to note the weighted average of TNB’s current borrowing is at 4.6%. Comparatively, YTL Power is also at 4.6% and Malakoff at 4.8%.

TNB would strategically lose out to Nebras-CGN since the Chinese are able to secure financing at a cost of less than 3%.

The fifth point is the financial points with regards to TNB acquiring Edra Energy. The acquisition of the group of 13 IPPs is the ability for TNB’s exposure to financial commitments, taking into consideration its own profitability track record, the ability to restructure and meet its financial commitments and projection, with and without the acquisition.

Considering that fact also means TNB would attain better economies of scale and cost of power generation, distribution and maintenance of assets for the said operational activities could be maintained at an optimum level for consumers.

All the 13 IPPs are operational, profit centres and earning cash.

Projection of power

Projection of power

The sixth point which is an extension to the fifth point is that TNB would be expanding its current level of group consolidated revenue and net income.

Currently, TNB is already the single largest contributor to Khazanah Holding Bhd’s portfolio of investments. Better profitability would contribute to higher net income to the Federal Government via the dividends distributed by Khazanah, on top of the taxes collected.

TNB is also one of the largest corporations in Malaysia. It could be measured from the perspective of group revenue, EBITDA, total assets, market capitalisation and 34,000 odd workforce.

The seventh point is value that Edra Energy would brought forth in TNB and Khazanah. The news about the lowest bid for Edra Energy today already shot TNB shares by more than RM1.00.

It is without doubt about the market bullishness on the possibility that TNB acquiring Edra Energy and offer better value and net income to investors.

TNB shareholders

TNB shareholders

The three major investors of TNB are Khazanah (29.7%), EPF (15.9%) and KWAP (8.9%).  Higher dividend yields is reflective of the better direct commercial benefits of 54.5% the shareholders, which covers almost all retirees now and the future.

Currently, TNB earning per share (EPS) is at 108.4 sen and dividend is at 29 sen per share.

The eighth plan is the acquisition of Edra Energy is an opportunity for the Federal Government to indirectly provide TNB’s opportunity and role to be an international power producer. The eight IPPs abroad which would add to the expansion of the current portfolio.

Its the perfect opportunity for TNB to be an instant player in international power production game. The IPPs under Edra Energy would generate its own revenue and cash to sustain operation and contribute into the consolidated group books.

These power production brown fields would cut the process short as compared if TNB were to start from greenfield upwards.

The ninth point for consideration is about also related to finance. It is learnt that TNB plans to restructure all the RM6billion borrowings that come with Edra Energy upon consolidation into the financially sound TNB Group.

TNB’s current net total asset position and the advantage of having RM2.5 billion in cash would provide the better position for these borrowings to be restructured for more favourable commercial papers, rates and strategic terms.

The tenth point is about the vendor program of TNB. As an end-to-end power producer, distributer and asset manager, TNB would open up for more opportunities for all the vendor development programs which include the Program Pengilang dan Pembangunan Vendor Bumiputera.

TNB vendor development program has demonstrated great success that the vendors are able to provide better rates. These vendors already serving TNB through subsidiaries like TNB Remarco would now have the opportunity to be in the international arena.

The eleventh and probably most important point is that for the strategic interest of energy production and energy security, the majority control of the end-to-end factors of production of power of generation, distribution and management should in the hands of Malaysians.

It is also believed that TNB would be in a better position to negotiate with upstream energy providers such Petronas and authorities in the likes of Energy Commission and Ministry of Energy and Green Technology. It would be translated in better terms in the new and renewed power production agreement (PPA) and safeguard the interest of all stakeholders, especially the consumers.

Out of 8.4 million TNB accounts, 80% of them are dwellings which only contribute to 20% of the revenue.

The twelfth point that the consolidated power production of TNB in Malaysia (current at 11,700MW which is 55% of the Malaysian power generation) would be raised to 17,300MW after the acquisition of Edra Energy where the five IPPs producing 5,590MW.

That capacity would propel TNB to the power production around the region in the likes of China Light and Power (18,800MW).

It is believed that 1MDB was the strategy to provide long term benefit for the power production and energy security of the nation. As planned, then the market capitalisation, value creation and projected income from Edra Energy was to be prtly resolved upon the initial and later the revised IPO.

The thirteenth point is that 1MDB board of directors (BoD), board of trustee (BoT) and Ministry of Finance should realise that Edra Energy should be acquired by TNB for consideration offered and the process to arrive at the point.

The fact is that the extraordinary general meeting (EGM) for the acquisition would be decided primarily by Malaysians for a successful Malaysian plc, is a worthy consideration for 1MDB to make the necessary concession. It would also provide a considerable relief of the current financial and cash-flow woes.

The fourteenth point is that 1MDB need not to make money, for the relieve of Edra Energy from its books.

The Rationalisation Plan tabled to Cabinet on 28 May 2015 could also be restructure for the consideration the left-pocket-to-right-pocket transaction, where the positive realisation would be in the form of strategic benefits by TNB, Khazanah, consumers and Malaysia’s long term energy policy.

The fifteenth and final point is the summation of all these points that the strategy that 1MDB started out to with the acquisition of all 5 Malaysian IPPs and 8 abroad could be realised through Edra Energy being reconsolidated under TNB.

The beneficial realisation from the acquisition of Edra Energy of the consolidated power generation, distribution and management points for a brighter future for the consumers, Khazanah and the Federal Government. After all, power and energy security, is one of those top most priority and  strategic importance the Federal Government should preserve.


Published in: on November 5, 2015 at 20:00  Leave a Comment  

Keeping it within the family

There is a growing concern about 1MDB’s proposal to rationalise its investments on energy and power generation conglomerate Edra Global Energy  Bhd. (Edra), as part rationalisation of 1MDB’s capital and debt exposure, that the new owners would be foreigners.

It is part of Group Exec. Director Arul Kanda’s rationalisation plan for capital and debt restructuring and operationalisation of investment within 1MDB, presented and approved by he Cabinet of 29 May 2015.

The bids for Edra Energy are already in:

The Star story:

1MDB draws up Edra list, TNB included

Thursday, 24 September 2015

PETALING JAYA: 1Malaysia Development Bhd (1MDB) has reportedly shortlisted several foreign parties, including Qatar’s Nebras Power QSC, Hong Kong-listed CGN Meiya Power Holdings Co and Saudi Arabia-based ACWA Power International for the sale of its power generation arm, Edra Global Energy Bhd.

Tenaga Nasional Bhd (TNB) has also been selected to participate in the sales of 1MDB’s power plants, according to a report by Bloomberg.

The report quoted sources as saying that the assets may fetch an equity value of as much as RM8bil.

The Bloomberg report also noted that foreign bidders might be restricted to owning no more than 49% of the plants and would be encouraged to team with a local partner, unless they seek an exemption.

1MDB had yet to revert to StarBiz queries on whether it had applied for a waiver to sell its power assets to foreigners and a confirmation on some of the bidders shortlisted.

The Energy Commission said it had referred StarBiz queries to the Energy, Green Technology and Water Ministry.

The ministry has yet to reply.

On Sept 7, 1MDB said it had already shortlisted four parties for the final bidding stage for the sale of Edra Global but it did not disclose the names.

1MDB is a wholly owned subsidiary of the Finance Ministry and is facing cash flow problems with debts of almost RM42bil.

It has assets of more than RM51bil, which are mostly in the form of land for development.

1MDB plans to sell Edra as part of its restructuring to reduce its debts.

Edra has five domestic and eight international power plants with total capacity of 5,500MW that are estimated to be worth RM12bil collectively.

In July, TNB had bought Edra’s 70% stake in Project 3B or a 2,000MW coal-fired plant in Jimah, Negri Sembilan, for RM46.98mil.

Last week, StarBiz reported that Edra Global has invited parties to build a new power plant to be located in Alor Gajah, Malacca.

In an advertisement, Edra stated that it was inviting “prospective applicants to express their interest in participating in a tender exercise for the design, engineering, procurement, construction and commissioning (EPC) of a 1,800MW to 2,400MW combined-cycle gas turbine (CCGT) power plant in Malaysia for Edra and/or its nominee”.

Edra’s advertisement said the power plant project would utilise advanced gas-turbine technology to realise the highest thermal efficiency consistent with the expectation of the power industry.

According to its website, CGN Meiya Power is a diversified independent power producer in Asia in terms of fuel type and geography, with a portfolio of wind, solar, gas-fired, coal-fired, oil-fired, hydro, cogeneration and fuel cell power generation projects and a steam project in China and Korea.

ACWA Power is a developer, investor, co-owner and operator of plants with a generation portfolio of 15,731 MW of power and 2.37 million m3/day of desalinated water with an investment value in excess of US$23bil.

Meanwhile, the Doha-based Nebras Power was established in 2014 and has the backing from Qatar Investment Authority through a 20% stake held by Qatar Holding LLC.

Nebras Power said on its website that it is making targeted acquisitions in South-East Asia, Europe, and MENA region, as well as forming major energy services partnerships.

Edra Global Energy Bhd. which was slotted for IPO exactly a year ago but it was postponed. Bids were received for the rationalisation of Edra, which include from foreign corporations.


At the moment, these foreign bids poses as a hindrance for 1MDB to hive out its investment as part of the rationalisation plan.

The Star story:

Foreign shareholding limit poser for Edra Energy sale

Saturday, 26 September 2015

AS the race towards the sale of Edra Global Energy Bhd picks up, it is still not known if the transaction would be the first to see foreign shareholders owning more than 50% stake in power plants.

Of the four bidders that have been reported to be interested in Edra Energy, three are foreign names, with Tenaga Nasional Bhd being the sole party from the domestic market being interested.

Among the foreign parties, at least one has confirmed it has been in talks with 1Malaysia Development Bhd (1MDB) in respect to the purchase of the power assets.

Hong Kong-based CGN Meiya Power Holdings Co Ltd has confirmed it is interested in 1MDB’s power assets and has been in talks with the latter.

“… there have been preliminary discussions as to the proposed acquisition by the company and/or its affiliates of an interest in certain energy assets of 1MDB. However, no binding or definitive acquisition documentation has been entered into by the company in respect of the proposed acquisition. As such, the proposed acquisition may or may not proceed,” CGN Meiya says in a statement on the Hong Kong Stock Exchange.

State-backed CGN Meiya, an arm of China’s biggest atomic power generator is a diversified independent power producer in Asia in terms of fuel type and geography, with a portfolio of wind, solar, gas-fired, coal-fired, oil-fired, hydro, cogeneration and fuel cell power generation projects and a steam project in China and South Korea.

At the moment, foreign bidders are restricted to owning no more than 49% of the plants and are generally encouraged to team with a local partner to own power plants. This is a practise that has already been adopted by the Energy Commission when it put up the power plant projects for a competive bidding process.

Interestingly, this week, a local daily reported that there were concerns should the power plants of Edra be sold to foreigners as it would mark for the first time assets such as power generation plants to be controlled by parties who are non-Malaysians. The report further stated that more worrying was that the sale to foreigners would hamper opportunities for local vendors including bumiputra vendors.

The relevant authorities involved in the sale of Edra and foreign shareholding restrictions on power plants and 1MDB have so far not reverted on this matter.

The Energy Commission (EC), which is the regulator of the industry, referred StarBizWeek’s queries to the Energy, Green Technology and Water Ministry (KeTTHA).

“We have given some input (on this matter) to KeTTHA,” says an official.

The ministry, however, has yet to respond to the queries.

Meanwhile, at the time of writing, 1MDB has yet to reply to questions from StarBiz earlier this week on whether foreign-owned entities were among the bidders for Edra Energy and whether it had applied to the relevant authorities on seeking an exemption on foreign shareholding of the power plants.

Industry players say the participation of foreign buyers will likely be limited to 49% as with the case with participation of foreign bidders for new generation capacity in the past.

“Foreign parties are not allowed to own a majority stake in the power firm due to a nationality requirement under its power purchase agreement,” a banker notes.

Association of Water and Energy Research (Awer) president S. Piarapakaran says that based on the last two competitive bidding processes, the policy is straight forward – a maximum 49% cap on foreign equity.

“Secondly, electricity generation is also part of national energy security. Having a lot of power plants owned with higher foreign equity is not seen as a favourable move for a small economy like Malaysia,” he says.

Piarapakaran says any sale to entities that are foreign-controlled will create a precedence to other power plant owners to sell power plants to foreign companies.

“Therefore, the EC must be clear on government policies, bearing in mind that setting a precedence may backfire,” he says.

The sales of 1MDB power assets, valued at RM18bil in its books, is certainly gaining traction.

Early this week, 1MDB reportedly shortlisted several foreign parties, including CGN Meiya Qatar’s Nebras Power QSC and Saudi Arabia-based ACWA Power International for the sale of Edra.

TNB has also been selected to participate in the sales of 1MDB’s power plants.

The sale of Edra Energy is part of 1MDB’s rationalisation plan to reduce its debts of close to RM42bil.

1MDB was supposed to list Edra by the first quarter of this year, but had to withdraw its application due to uncertainties in relation to a 2,000MW coal-fired plant dubbed Project 3B.

The sale of 1MDB has not only attracted foreign parties but also local players. Besides TNB, the other companies that had expressed interested were YTL Power International Bhd and Malakoff Corp Bhd. But only Tenaga has put in an indicative bid.

On Sept 7, 1MDB said it had already shortlisted four parties for the final bidding stage for the sale of Edra Global but it did not disclose the names.

Edra has five domestic and eight international power plants with total capacity of 5,500MW worth RM12bil collectively.

In July, TNB had bought Edra’s 70% stake in Project 3B or a 2,000MW coal-fired plant in Jimah, Negri Sembilan, for RM46.98mil.

It has been an eventful journey leading up to the sale of Edra.

In the first week of March this year, 1MDB withdrew its submission seeking a listing of Edra Global after failing to meet Securities Commission requirements.

Late March, the Finance Ministry (MoF) appointed CIMB Group for the sale of Edra Global. But the mandate was relinquished a week later. Since then, 1MDB has been looking at a sale of Edra Global.

After the sale of Project 3B to TNB in July, Edra Global is now looking at commencing work on another power plant project in Malacca.

Towards this end, Edra has invited parties to build a new power plant to be located in Alor Gajah, Malacca.

In an advertisement, Edra stated that it was inviting “prospective applicants to express their interest in participating in a tender exercise for the design, engineering, procurement, construction and commissioning (EPC) of a 1,800MW to 2,400MW combined-cycle gas turbine power plant in Malaysia for Edra and/or its nominee”.

Edra’s advertisement said the power plant project would utilise advanced gas-turbine technology to realise the highest thermal efficiency consistent with the expectation of the power industry.


Naturally, it attracted many eye browse to be raised despite only five out of the thirteen power generation plants are within Malaysian waters.

Utusan Malaysia story:

1MDB jual Edra pada firma asing?

JOHARDY IBRAHIM | 23 September 2015 12:52 AM
11 2 Google +0
KUALA LUMPUR 22 Sept. – 1Malaysia Development Berhad (1MDB) dijangka mengumumkan satu daripada tiga firma asing sebagai pemenang bida untuk mengambil alih 13 aset tenaga Edra Global Energy Berhad miliknya yang bernilai RM10 bilion atau AS$2.3 bilion, dalam usaha mengurangkan hutang piutang syarikat tersebut.

Sumber industri berkata, firma tenaga berpangkalan di Arab Saudi, ACWA Power International dan Pihak Berkuasa Pelaburan Qatar dikatakan berada di hadapan dalam senarai empat pembida, bersama satu lagi entiti asing dan juga firma tenaga tunggal dari Malaysia, Tenaga Nasional Berhad (TNB).
“Keputusan itu dijangka diumumkan secara rasmi selewat-lewatnya awal Oktober ini iaitu minggu depan,’’ katanya kepada Utusan Malaysia di sini hari ini.
Sumber industri bagaimanapun, melahirkan kebimbangan keputusan menjual kepada entiti asing boleh memberi implikasi sebaliknya terhadap 1MDB yang kini bergelumang dengan pelbagai kontroversi dan persepsi.
“Sebanyak 15 peratus aset Edra merupakan loji janakuasa tempatan dan dengan kepentingan menyediakan bekalan elektrik yang lancar ke seluruh negara, ia adalah dalam kepentingan negara bahawa aset-aset itu kekal dikuasai entiti Malaysia, bukan dijual kepada entiti asing,’’ katanya.
Malah ujar sumber industri, langkah ini dikhuatiri memberi kesan kepada kerajaan Malaysia kerana penjualan aset Edra kepada entiti asing bermakna pertama kali dalam sejarah industri strategik negara, aset jana kuasa dimiliki orang asing.
“Bila dikuasai oleh orang asing, siapa dapat membendung kemungkinan harga lebih tinggi jika bukan para pengguna iaitu rakyat Malaysia?,’’ soalnya lagi.
Lebih membimbangkan ujar sumber industri itu lagi, penjualan Edra kepada entiti asing akan menutup peluang kepada vendor-vendor tempatan termasuk Bumiputera yang telah berjaya dibimbing selama ini.
1MDB pada asalnya, mengumumkan rancangan untuk menyenaraikan perniagaan tenaganya pada Julai 2014, untuk menjana dana sebanyak RM11 bilion.
Sebahagian daripada dana itu bertujuan untuk membayar balik hutangnya yang menggunung kepada RM42 bilion setakat 31 Mac 2014.
Menurut laporan, 1MDB ha­­rus memba­yar antara RM2.4 bilion hingga RM2.7 bilion setahun dari segi faedah pinjaman.
Rancangan tersebut bagaimanapun, telah dibatalkan dengan 1MDB memutuskan untuk menjual kepentingannya dalam Edra.
Aset Edra terdiri daripada lima loji jana kuasa tempatan dan lapan antarabangsa termasuk di Bangladesh dan Mesir selain merupakan yang kedua terbesar di Malaysia selepas Malakoff Corp Bhd. Syarikat kerajaan itu juga mempunyai asetnya di Emiriyah Arab Bersatu (UAE) dan di Pakistan menerusi syarikat usaha sama.
Keseluruhannya Edra memiliki kapasiti penjanaan tenaga sebanyak 5,500 MegaWat yang dianggarkan bernilai RM10 bilion oleh bank-bank.
1MDB sebelum ini telah menandatangani Perjanjian Pembelian dan Penjualan Saham (SSPA) dengan TNB untuk mengambil alih 70 peratus kepentingan di dalam Jimah East Power Sdn. Bhd. (JEP), yang dimiliki 1MDB dengan nilai RM46.98 juta.
– See more at:


For the record, the original plan for Edra Energy to be listed was in November 2013. However the delay in the award of Project 3B did not draw the right attraction for the IPO. Eventually, Project 3B was obtained in February 2014 and the works of IPO were restarted and the new target was set for November 2014.

However, the voracious and vile attacks of media such as Sarawak Report, The Edge etc. hampered the market confidence for the revised IPO plans. The delayed of Edra IPO affected the cash-flow of 1MDB and that spiralled into the vicious cycle.

Hence, the game of Edra IPO is back in play and part of the ‘Rationalisation Plan’.

Energy and power generation is deemed as ‘strategic’ and some people see ‘energy security’ as a very strategic interest that the nation should really closely guard.

Regardless, TNB is one of the bidders and there are commercial merits for Edra Energy be part of the nation’s premier power generation and distribution corporation. TNB is one of the core investments under Khazanah Nasional Berhad.

First of all, both Edra and TNB are Malaysian corporations and staffed by Malaysians. The culture and work relationship is seamless. The senior management of Edra are used how Malaysians do things and consumerism.

Edra Global Energy Bhd. portfolio

Edra Global Energy Bhd. portfolio

Secondly, since five of thirteen Edra power generation plants is here in Malaysia, there should be an economies of scale especially in resources and supply chain management.

The third point is that as a strategic investment of the Malaysian Government, Edra being part of TNB would be complimentary to deliver all the socio-economic development plans currently under the 11th Malaysia Plan and there on. Energy planning is a very important element to ensure the the nation’s growth is followed through.

The electrification program into the rural areas is still very much a key ingredient of Prime Minister Dato’ Sri Mohd. Najib Tun Razak’s ‘Transformation Plan’. This include the development and strengthening basic infrastructure to all communities.

Projection of power

Projection of power

An interesting fourth point is that the power generation sector in Malaysia generates USD35 billion per annum. It is of strategic important that Malaysian corporations are the net benefactors of the income derived from this sector.

The fifth point is that Edra is at the moment generating almost 14.4% of electricity within Malaysia. TNB at the moment is providing 55% of the power generated in Malaysia. The acquisition of Edra would bring TNB’s power generation level to over 69%.

The synergy for TNB to acquire Edra as part of its power generation program would definitely brought about economies of scale and strategic benefits not only to the corporation, but Malaysian consumers.

The sixth point is that Edra would be good extension of TNB for revenue of power generation from abroad since eight of the power plants are in Bangladesh and Egypt and associate corporations in UAE and Pakistan. It is a matured investment and could be realised immediately.

On the issue or even perception that TNB and/or Khazanah would be a bail out for 1MDB, it would easily mitigated that TNB is a plc and the shareholders would decide on this strategic corporate exercise.

TNB shareholders

TNB shareholders

After all, the offer would be a commercial in nature and the projection of future income and how it would affect the cash-flow of TNB as a Group would itself be the arguments for the bid.

The decision would be purely based on commercial basis which include the ability of this deal be financed either internally, within the Khazanah Group, from commercial banks and/or financial houses or a hybrid mix of the variable sources.

The fact is that 1MDB rationalisation plan for Edra Global Energy attracted a handful of good foreign bids. It is commercially viable and TNB should take the calculated risk and acquire the conglomerate.

Recently, there are valuable lessons learnt from the artificial controversy arisen from really bad bloggers canvassing the hiving off of the TRX parcel to Tabung Haji was advocated as “Bailing out 1MDB”. The fact is that, the TRX deal was a very good investment with huge commercial potential and its reflective from other deals.

It is without doubt that for the strategic sake of Malaysia, this deal should be transacted from the left pocket to the right pocket, in utmost transparency and on commercial basis.

Published in: on September 27, 2015 at 18:00  Comments (6)  

Celcom launch Zipit Chat


A secured communication mobile application for Android and iOS platforms based on the AES-256 military grade encryption technology called Zipit Chat, has been launched and now live for commercial download.


It is a product developed 100% by Malaysian R & D engineers in Malaysia and it is collaboration between mTouche Technology Bhd. and Celcom.

As part of the campaign to the official launch, Celcom did a Hackerton to entice the interest on the feature of this applications, which is about secured messaging. The online campaign reached  18 million viewers and 17,000 registered to participate in the challenge to hack the messages, which provided a prize of RM100,000 in cash.


None succeeded!

Hence, the encryption feature of the secured messaging application which enables subscribers to have a tamper-proof communication through sms, chat, e mail and voice-over-internet-protocol (VOIP), is the main selling point of the online product.


How it works

  • In one-to-one communication, there is a mutual key exchange between sender and receiver using RSA algorithm.

Any 3rd party will not be able to decrypt the messages without the key. All messages communicated via Zipit Chat use 256-bit AES encryption technology.


  • In Group chats, a mutual shared key within a group is used to encrypt and decrypt messages communicated via the group channel.
  • In all the communication, only encrypted data will be sent via the line. Even if there is an interception during transmission, all they get is gibberish because they do not have the key to decrypt the actual message.
  • Zipit Chat also enables secure notes feature where users can keep their sensitive data encrypted in the application.

Think of it as a physical safe that keeps all the private and confidential files, locked with a padlock, and the rightful owner has the lock to open it.

Soon, it is expected that Celcom would bundle the application in some of the plans.


The launch and officiating of the Zipit Chat was done by Celcom Chief Marketing Officer Zalman Affendy Zainal Abidin and the Branding Team. The event was graced by Celcom CEO Dato’ Sri Shazalli Ramly.


This is a new milestone for Malaysians to communicate securely and with a lot of comfort.

Published in: on September 23, 2015 at 15:15  Comments (5)  

One Krypto: A secured messaging system for Malaysians

A review on the Malaysian secured messaging application which was build on AES-256 military grade encryption, now ready for the Malaysian market for commercial use.

Malaysian Company Creates App That Hides Your Messages – From Everyone


Print Email Details Published on Friday, 18 September 2015 08:59 Written by Mushamir Mustafa

One Krypto is here

One Krypto is here

With the proliferation of leaked secret documents – from Wikileaks to 1MDB’s banking details to the leak of dating and affairs website Ashley Madison’s passwords onto the internet, the need for protecting messages transmitted digitally is at an all time high.

And for those who have valuable information or wanting to hide the cat in the bag, secrecy and privacy has arrived in the form of an app. Is this too good to be true?

One Krypto is a wholly Malaysian developed app that allows users to communicate securely and includes several encrypted communication channels via chats, emails, voice and video.

The way it works is two people will have the app in their phones. Adam and Sarah add each other as friends, and now both have a ‘key’ code that is unique only to them. Now say Adam sends a message to Sarah using One Krypto, the message is encrypted on Adam’s phone, sent to One Krypto’s servers which then transfer the message to Sarah’s phone. The message is decrypted in Sarah’s phone, using their unique ‘key’.

In the end, while the message is placed in the server, it is encrypted, and no one can understand it, unless you have the key.

One Krypto aims to tap into this yet untapped market, banking on the growing need for privacy which applications have yet to provide.

Malaysian Digest sits down with the Vice President of Business Development, Wan Azrain Adnan of mTouche Technology, the developer of One Krypto to find out more about this potential game-changer in the crowded mobile app business.

mTouche Technology Vice President of Business Development, Wan Azrain Adnan Pic: Mushamir Mustafa

mTouche Technology Vice President of Business Development, Wan Azrain Adnan Pic: Mushamir Mustafa


Why One Krypto?: Because more often than not nowadays there are phones being hacked and tapped. We see that there’s a need now that people are beginning to be more privacy and security conscious as they are looking for more ways to communicate securely.. There’s a void in the market currently for a product that offers secured communications.

How different is it from Silent Circle? (Silent Circle also provides multi-platform secure communication services for mobile devices and desktop): Similar but not quite. One Krypto has it all in one application. We have different pricing and offerings. We do encryption end to end, peer to peer, meaning if someone were to come to our server you cannot see anything as it is encrypted. It will be encrypted on my device, the server acts as the postman, and once it reaches your device, then only will it be decrypted.

Is anything left in the servers? Who owns the servers? : We don’t keep anything in the server. It’s kept in people’s device, the server is just the post office. It will detect if you’re online then it will send the message. If you’re offline, it won’t deliver. Nothing is left in the server per se.

The different platforms of mobile communication enabled to be encrypted by One Krypto

The different platforms of mobile communication enabled to be encrypted by One Krypto

The server can be hacked, but you cannot read the mail. The primary technology that we use is the 256-bit AES encryption technology, a military grade encryption technology. Nobody has been able to hack it thus far.

How do we send each other messages?: You need to add the other person through the app and once approved, then only will the two of you exchange ‘keys’, which is unique. The key is a code, non-hackable. The key is within the phone.

What if one’s phone is stolen?: If stolen, well, there’s no way do deal with it. The only way for someone to view your communication is for someone to actually steal your phone and go into One Krypto per se. We do not discount the possibility of a remote lock function and in the pipeline we also want to release a video messaging platform.

We have what we call Stealth Mode, where we can hide the icon itself, which will reveal only once you’ve type in your passcode. (The app is still findable if you look through your phone’s apps in Settings). For us that could be the best line of defence as no one knows the app is present. Secondly we have a self-destruct timer for the messages, where after they have seen it, it will be deleted. Once it is deleted, it is deleted. Thirdly, we’ve disabled screen capture on Android devices (meaning you can’t use screen capture anymore) however for iOS devices we are restricted from doing so as its part of the software.


What if the police come asking for the data for an investigation?: If the police do come asking us to hand over confidential information for an ongoing investigation, for example, yes we can hand it over but it is encrypted. We would just give the police gibberish because the key is not with us, it’s with the two people. Even we don’t know the message ourselves. We are just the postman, we don’t know what’s inside the mail. We just take the mail and send it.

Right to privacy: People have the right to feel safe and to feel secure in their communications, whether they use the technology for something that is lawful or unlawful that is not up to us to decide. We are just tech providers and cannot tell someone how to use the technology. Just like hand phones, whatever you want to do with it, Celcom or Samsung cannot be at fault for whatever you do with it.

Why One Krypto and not Silent Circle?: There’s room for expansion for us in the Malaysian market. What we offer is much more cheaper, with our basic plan going at RM10 versus Silent Circle’s USD99.

Mobile phone security threats

Mobile phone security threats

On government surveillance: We have to serve the right to privacy and security of the public so until and unless Malaysia comes up with a limiting regulation to users in terms of mobile devices, then we’ll abide by it.

Can we use One Krypto for criminal, immoral purposes?: Even in the US they have yet to stop companies from using encryption. You can even sell nuclear bombs for all you want, or prostitute children, the concept is that we don’t know what people do with it. We are a tech company, we provide the service to serve the demand for privacy and security.

When will this be released?: We are about to commercialize One Krypto soon. Our testing has showed positive results, user acceptance is good, the application itself is user friendly, not much difference than what they are used to. Eventually one day we’d like our consumers to compare One Krypto with Whatsapp and other services. As far as we know, One Krypto is the only application with multiple communication channels under one application. Whatsapp started with chats then moved onto voice. We have three now, including email, and will also have video soon enough.

Who can use this?: Our target market includes (but not limited to) businesses which communicate and handle highly confidential information, regional businesses who need direct communication channels abroad, professionals who deal in highly confidential environments and clients, government officials and staff, and privacy conscious public.

What’s in store for the future: We want to expand into desktops, besides having video calls as well. Also we’d tailor the experience to suit people’s needs first, for example if business people prefer to use the calendar or business card reader first as opposed to the mass market.

Currently One Krypto is available for iOS and Android and may be expanding into Blackberry and Windows devices as well. Pricing starts from USD8.99 for 3 months to USD28.99 for 12 months.

For more information, check out

– Malaysian Digest

Published in: on September 18, 2015 at 10:30  Leave a Comment  

Red causing Red Tumbler Fright

In the current economic crisis and volatility which was caused from China’s devaluing its Yuan to prop exports and all the corrections that came with it, the upcoming threatening capital-market-centrally-controlled-nation intends to withdraw its US Treasury commercial papers and risk a trigger of further economic uncertainty.

CNN money story:

China is dumping U.S. debt

By Matt Egan @mattmegan5
It’s no secret that China is the largest holder of U.S. debt.
So should Americans be concerned that China has started dumping some of its Treasury holdings?

After all, it raises serious questions about whether China will keep lending Washington money to help finance the federal deficit in the future.
But right now, China is selling because it’s in dire need of cash. Recently, it unleashed multiple moves to support its markets and prevent its currency from a freefall, while at the same time trying to stimulate the economy.
China yanks record sum from war chest
China owned $1.3 trillion of U.S. Treasuries as of June, making it the biggest holder of U.S. debt.
But China’s foreign-exchange reserves plunged by a record $94 billion in August, according to the country’s central bank, leaving it with a war chest of $3.6 trillion. Analysts say it’s very safe to believe a big chunk of that decline occurred due to a reduction in U.S. Treasury holdings.
The selling and the potential that China will not be buying U.S. debt in the near future raises questions on its potential to increase America’s borrowing costs.
Some of this might already be happening, at least at a small scale. When stock markets are turbulent, investors usually rush to the safety of U.S. Treasurys and yields fall. However, despite August’s extreme stock volatility, rates on Treasurys actually rose slightly in late August.
Part of that move is likely due to Wall Street betting the Federal Reserve may raise interest rates next week. But market participants also suspect the unusual action in the bond market was driven by China dumping Treasuries.
Related: China is the scariest threat to stocks since 2009
China is raising lots of cash
This time, Beijing is cutting its Treasury holdings out of a weakened position as it tries to stave off more declines in its currency. China is also propping up its stock market, which lost half its value in the span of just a few months this summer.
“Capital outflows have skyrocketed in China and the yuan is under intense selling pressure. The only thing they could do is sell Treasuries to buy their own currency,” said Walter Zimmerman, chief technical analyst at United-ICAP.
Related: China has spent $236 billion on its stock market bailout
China isn’t trying to sink the U.S. economy
There have long been concerns that China could sink the American economy by unloading its gigantic holdings of Treasuries, sending borrowing costs skyrocketing.
Thankfully, those doomsday fears don’t appear to be at play here yet.
“If China’s U.S. Treasury stock is a nuclear bomb, moderate sales to offset selling pressure on the yuan are unlikely to set off an explosion,” Michael McDonough, chief economist at Bloomberg Intelligence, wrote in a recent report.
But moves could raise borrowing costs here
Still, China’s sales could make Treasury yields higher than they would normally be. That’s of concern because Treasury rates are used as a benchmark that set the cost of borrowing for items like credit cards and mortgages.
While it’s “not the end of the world,” SkyBridge Capital senior portfolio manager Troy Gayeski said higher yields could lead to a “slowdown in the housing recovery.”
What’s key is how much cash China ultimately needs to raise to defend its currency and stock market. No one, not even China, knows that figure.
Related: Loud chorus of voices tell Fed: ‘Don’t do it’
China may go on a U.S. debt diet
So far, the American bond market seems to be taking the China move in stride.
The yield on the 10-year Treasury note is currently sitting at 2.22%, about unchanged from a month ago.
Demand for U.S. debt is healthy now especially when compared to the ultra-low, or even negative rates in other economic powerhouses like Germany and Japan.
Policymakers in Washington should hope that trend continues. Now that China’s economy is in disarray, America might not be able to count on its No. 1 lender to gobble up U.S. debt like in the past.
“China’s surplus is slowing. That gives them less firepower to accumulate Treasuries,” said Thomas Urano, managing director at Sage Advisory.


The dumping of US Treasury bonds by China would trigger a sporadic activity to gain from the yield of these bonds. That would  gradually trigger the USD to rise against other currencies. That would spiral the current global economic crisis into another vicious cycle.

China economy economic slowdown triggered a global stock market slide and affected many currencies. As a result, China injected monies which came from several pension funds to prop the stock market and to invoke interjection into the economy.

China is said to have a lot of problems without real monetary policy. Hence, the economy is expected to slide further. story:

China’s economy isn’t getting any better

by Laura Lorenzetti @lauralorenzetti SEPTEMBER 10, 2015, 12:41 PM EDT

The data looks grim.

China’s economy has been on a rollercoaster ride for the past few months, and the latest data out of the world’s second largest nation isn’t getting much better.

Here’s a quick rundown on the situation.

The background

Since mid-June, the main stock index in Shanghai is down about 40%. Its stock-index futures market, the world’s biggest, hit record lows on Wednesday after falling 99% from June highs.

At the same time, the nation has struggled to stabilize its currency. The People’s Bank of China (PBOC) devalued the yuan by about 2% in early August, an unexpected move that brought the currency’s value closer to what the market believes it ought to be. It also may help China’s export sector.

But Chinese officials have been intervening to stop the yuan from going into freefall, which led to a $94 billion decline in its foreign currency reserves last month.

Latest update

The greatest risk currently for China is deflation, which could slow economic growth considerably.

China’s Producer Price Index (PPI), a measure of change in the price companies receive for their output, fell 5.9% in August, a much steeper decline than expected. The drop cut into profits at Chinese firms, which has already led to layoffs.

Still, consumer prices actually gained last month, mostly due to soaring food prices. Non-food inflation remained unchanged at 1.1%.

So, what is China doing about it?

China’s Premier Li Keqiang went on the record saying the nation won’t pursue a quantitative easing policy, but that doesn’t mean the government is standing idly by. There have been several interest rate cuts this year, and Chinese officials are organizing debt swaps with local Chinese governments to boost investments.

Meanwhile, when the market was dissolving, the PBOC also jumped in to inject funds into a state-owned entity that lends to brokerage firms as a stabilization effort.

Could this affect the U.S.?

Fortune’s Chris Matthews took a deeper look at the issue, finding that China accounted for a third of global growth this decade compared to just 17% for the U.S. China’s fate will weigh heavily on the global economy, but given America’s low reliance on exports (only about 15% of GDP), it could affect the U.S. economy less drastically than it might other nations, particularly ones that rely on the export of commodities used in manufacturing.


Published in: on September 11, 2015 at 12:00  Comments (4)  

Shattered success factor

AirAsia Big Boss Tony Fernandes should come out and boldly admit to the public some of his pronouncements of his low cost carrier success all these years may not be truly as he claimed to be.

The Star story:

AirAsia X finds fictitious services

Friday, 28 August 2015

AirAsia's plane is seen take off from KLIA2 during the AirAsia and AirAsia X new office ground breaking ceremony in Sepang. AZMAN GHANI / The Star

AirAsia’s plane is seen take off from KLIA2 during the AirAsia and AirAsia X new office ground breaking ceremony in Sepang. AZMAN GHANI / The Star

It involves 24 payments totalling RM7.01mil made to a service provider

PETALING JAYA: Long-haul budget airline AirAsia X Bhd has discovered payments for fictitious services that adds up to RM7mil.

In a filing with Bursa Malaysia, the firm said its internal and external auditors had recently discovered that certain payments had been made to a service provider between the period of 2010 to 2014 for services which were now established to be fictitious.

“Following the discovery of the irregularities, the board has on the recommendation of the audit committee appointed PwCCS to carry out a forensics audit and instructed the management to ensure the availability of all relevant documents and/or key personnel for PwCCS review and interview, where applicable,” the aviation firm said.

During the course of the forensics audit, the auditor PwCCS discovered 24 payments totalling RM7.01mil had been made to a service provider for fictitious services.

The payments were authorised by a person in a management position within AirAsia X.

Based on the forensics audit findings, the irregularities had been confined only to a sum of RM7.01mil, it added.

“The board is of the opinion that the amount involved in the irregularities does not have any material financial or operational impact on the company,” AirAsia X said.

Following the discovery, the company has taken several measures to safeguard its assets and interest.

Among others, it has sought legal advice on the possible courses of action the company can take to recover the losses and lodged a police report.

On top of that, it is reviewing the current internal control process to ensure that similar transactions will not recur.

“The board could not make any announcement earlier as it did not have sufficient evidence to substantiate the allegations and to assess with certainty the financial and operational impact to the company,” it said.

For the second quarter ended June 30, the firm raked in RM653.03mil for its revenue but made a loss of RM132.94mil. That’s compared to a revenue of RM671.61mil and net loss of RM128.79mil in the previous corresponding quarter.

During the quarter, the group recognised unrealised foreign exchange loss on borrowings of RM30.9mil as compared to a gain of RM31.9mil a year earlier due to the weakening ringgit. It also saw lesser passengers flown but average passenger fare has increased by 7.2%.

For the first half-year, its topline was at RM1.43bil while losses sum up to RM258.86mil. Net asset per share stood at 20 sen per share.

The stock traded 1 sen higher to 16 sen with a turnover of 19.17 million shares.


Needless to say, this is very embarrassing admission to Bursa Malaysia, which is an avenue to tell all the stakeholders of AirAsia X. It includes the customer base.

These transactions are pro-rated to be RM 1.4million a year or almost RM120,000 per month. That is about RM4,000 per day.

FY 2014 AirAsia X posted a revenue of RM2.94billion and net loss of RM529million. That is half a percent of daily takings which had been discovered gone into one the fictitious service providers.

It could be assumed that a fraction of what the consumers paid for AirAsia X services did not go to the services that they paid for but probably is a part of a continuous scam, which slipped through AirAsia X’s safety net.

Simply, the consumers may not get what they actually paid for. Now, the market talk is if this falling out of AirAsia’s safety net is true, is that the extend of the leakages from the transactions derived from its online portals or third party payment gateways.

That is counter productive to Fernandes’s success story for the longest time, is based on the low operating cost by eliminating ticket sales through third party agents.

What is embarrassing that Fernandes continuously proudly claimed that e commerce is one of AirAsia’s key success factor. story:

3 AirAsia Success Factors

3 AirAsia Success Factors that entrepreneurs should look at to grow their businesses. 10 years on after taking a bold chance to start a low cost airline, Tan Sri Tony Fernandes has built AirAsia from two planes to 115 aircraft today, flying to more than 400 destinations spanning 25 countries, making the slogan “Now Everyone Can Fly” comes true.
So what are AirAsia Success Factors?
When the music industry failed to adapt quickly to the World Wide Web, Tan Sri Tony Fernandes decided to make a clean break. He left his job to pursue a childhood dream: Set up Asia’s 1st ever Low Cost Airline.

Today, AirAsia is named as the World’s Best Low-cost Airline for 4 consecutive years 2009 – 2012 by Skytrax. Air Asia has become a household brand in Malaysia and beyond in less than a decade.

In my opinion, Air Asia has not just only revolutionized the entire airline industry but more significantly, it has allowed more Malaysians especially the younger generation to travel abroad and see the world.

AirAsia Success Factors

This experience has enabled many Malaysians to be critical to the nation’s developments; they count the blessing of their mother land but at the same time, give constructive criticism by comparing to more developed nation as well as to progress which went awry.

There are indeed, a lot of lessons for Start Up to take home from AirAsia stories. Tan Sri Tony Fernandes has shared with BBC on his way of doing business.

He adopts a “walk around” management style. “If you sit up in your ivory tower and just look at financial reports, you’re doing to make some big mistakes.” For a few days every month he works on ground or in the cabin crew and he made important decisions by getting the feedback from the crew.

Being a big fan of AirAsia and its business model, there are 3 AirAsia success factors to learn from:

1. Never afraid to challenge the norm.

A few years ago, people had to call a travel agent or airline operator to buy a flight ticket. Air Asia challenged the norm by riding on the e-commerce wave. It invested in a user-friendly website interface and allows travelers to book and print flight ticket anytime and also introduce online check in services. This has proven to be enormously successful especially in engaging with the Gen-Y customers.

AirAsia Success Factors

2. Dare to Think Big and Serve the right Customer

Air Asia business model has always been focusing in low cost operation and serving the mass market. They know their targeted customers well and do not directly compete with other premium airlines. 10 years ago traveling by air was a luxury. Air Asia was daring enough to think big and today, it is truly “Everyone Can Fly”.

3. Create Complementary business opportunities, they can be Huge

This is shared by Luke Bong and I think it is an exemplary example for businesses to learn.

AirAsia Success Factors

When we fly AirAsia, most likely we will use their services such as Sky Bus from KL Sentral or stay at Tune Hotel. It is very important to think of innovative ways to get more out of your existing customers.

The question is not about how to squeeze more profit out of the existing operations, but how to provide add on values so that customers are willing to pay for even more.


Announcement to Bursa Malaysia is not enough enough considering that Fernandes is aloud when criticising and even dramatising against other corporations, especially Malaysia Airports and Malaysia Airlines.

Example, recently AirAsia  made a big ruckus about the defective Malaysia Airports’ KLIA2 and making a claim against the GLC which is part of Khazanah Holdings Bhd.

Bloomberg story:

AirAsia Demands $107 Million Damages From Airport Operator

Michael Arnold
July 31, 2015 — 5:09 PM HKT Updated on August 1, 2015 — 8:24 AM HKT

AirAsia Bhd., Southeast Asia’s largest budget carrier by market value, is asking the Kuala Lumpur airport operator for 409 million ringgit ($107 million) to cover losses and damages the airline says it suffered using the new and old budget terminals.
AirAsia sent a letter Friday demanding payment from Malaysia Airports Holdings Bhd. and a subsidiary, claiming they breached their duties at the airport. The letter claims problems at the new klia2 terminal have hurt the airline’s reputation, “as the public perception is that the failings of the facilities are within the control of AirAsia” as klia2’s largest user.
The 4 billion ringgit terminal, which opened in May 2014, is sinking, causing cracks in the taxiways and pools of water that planes must drive through, Bloomberg News has reported. AirAsia says the defects could cause flight delays, increase wear and tear on planes and pose safety risks.
Malaysia Airports says the depressions and ponding are caused by soil settling unevenly in the apron and taxiway, where some of the structure is built on piling and some stands on normal ground. The operator has patched and resurfaced problem areas and is building a concrete slab that it says will serve as a more permanent solution by next April.
In a statement late Friday, Malaysia Airports called AirAsia’s claims “baseless” and said it would “vigorously challenge them.”
“We are surprised by some of these assertions about klia2” and the old low-cost carrier terminal “after AirAsia has benefited from the facilities provided by Malaysia Airports since 2001 to grow into the largest LCC in Asia,” the airports operator said in the statement.


Its time Fernandes literally put his money where his loud mouth is or was. To be exact, RM7.01million.

Published in: on August 28, 2015 at 23:00  Comments (9)  

Arul: Let the investigators do their work

1MDB President and Group Executive Director Arul Kanda Kandasamy gave a landmark interview on TV3 Soal Jawab last night. His prompt and casual answers are reflective of his confidence on the highly controversial strategic investment corporation of he Malaysian Government. transcript:

Full Transcript Of TV3 Interview With 1MDB President And Group Executive Director

KUALA LUMPUR, Aug 12 (Bernama) — 1Malaysia Development Bhd (1MDB) President and Group Executive Director Arul Kanda spoke on wide-ranging issues raised about the sovereign wealth fund, including investigations into its affairs conducted by Bank Negara Malaysia, the Royal Malaysian Police, the Malaysian Anti-Corruption Commission and the Public Accounts Committee (PAC).

Arul also elaborated on the implementation of the 1MDB’s rationalisation plan that would be able to resolve its debts within four to six months.

He said 1MDB was on track to meet its strategic development objectives and did not encounter problems in wooing investors, but was saddled by political accusations and allegations.

Here is the full transcript of TV3’s Norzie Pak Wan Chek and Izwan Azir Salih’s conversation with Arul on the “Soal Jawab” programme last night:

PREAMBLE: 1MDB president and group executive director Arul Kanda, in a statement, has asserted that he was fully responsible for any action against the company after helming it. He gave the commitment to carry out his job professionally and to provide all the necessary information to assist the authorities seeking the truth behind 1MDB affairs. Arul was appointed to carry out a strategic evaluation of 1MDB and now he spearheads the implementation of its rationalisation plan which was tabled to the Cabinet on May 29. So far this plan, which is set to reduce the company’s debt level, is running smoothly. This was attested from the repayment of loans amounting to RM3.6 billion which was announced on June 8.

First and foremost, let us get to know Arul, who was previously a banker in Abu Dhabi, the United Arab Emirates and the UK. You have experience in restructuring companies, but not many people know you well until after the 1MDB affairs become public knowledge.

QUESTION: It is understood that you have a legal background.

ANSWER: Yes, I have an LLB and a Masters in Law degree and studied in the UK for several years, after which in went into investment banking in London, Bahrain, Dubai and previously Abu Dhabi.

QUESTION: When you were given the responsibility to lead 1MDB, it was debt-ridden, its governance was questionable. What motivate you to accept the responsibility? Probably there were specific reasons related to the situation faced by 1MDB then?

ANSWER: There were many things that we needed to see before taking up a new post. As a professional, I was intrigued with the news that I heard and read on the internet and social media on 1MDB while I was in Abu Dhabi. I heard a lot about 1MDB and its challenges. I would like to know more about it and also with the background that I have in my work and the knowledge that I have on this kind of work. The opportunity to return home and to implement the rationalisation plan was an opportunity that I needed to take as a professional. And we have to try and see what we can do.

QUESTION: Were the circumstances described on 1MDB before similar after you had returned home?

ANSWER: Most of them were similar. Ironically, there were mostly negative news, but the audience needs to know that 1MDB is the biggest power producer in Malaysia. It also owns strategic areas in Kuala Lumpur and in other parts of Malaysia. So business is as usual, we carry out daily tasks, but there were challenges to be overcome, especially the company’s debts. So to me as a professional, we look at the whole picture, not part of it only. The whole picture is what I had identified before returning home, there but there were other challenges such as the political situation and so on – which is not my expertise. I am a businessman and a banker, not a politician, so it was a little difficult.

QUESTION: So, in other words, before you joined 1MDB you were mentally prepared to face the brickbats or the debts payable and so on and certainly you had a special plan to drive 1MDB towards a better direction?

ANSWER: Alhamdullillah, a workforce of about 1,100 professionals in 1MDB go about their daily duties to generate power, and develop TRX and Bandar Malaysia and so on. So to me, it’s running smoothly and we do not need to worry. But on the part of the financial burden, it takes a lot of air time in Malaysia, it is a bit difficult. But my background in the Middle East in the implementation of rationalisation plan was indeed my expertise, as well as legal and banking expertise. InsyaAllah, we can carry out the plan that was presented to the Cabinet on May 29, 2015.

QUESTION: Let’s talk briefly on 1MDB’s core businesses as to the general public it is a company bogged down by debts. Briefly tell us about 1MDB background.

ANSWER: It is rather difficult to give a brief story as it is actually a lengthy one, but I will try. It originates from the Terengganu Investment Authority (TIA) that was established as a sovereign wealth fund, so a government fund, but it was changed because it was then only for the state of Terengganu, so when Datuk Seri Najib (Tun Razak) became the prime minister, a decision was made to convert TIA to 1Malaysia Development Bhd (1MDB).

So with the change, the strategic direction of the company converted to a strategic development company. This means the company delves into projects in the interest of the country to become catalysts, create new way hybrids for the private and government sectors, and also to bring in foreign direct investment.

So, that’s the first chapter. Secondly, 1MDB model from the beginning was to develop projects through loans. Why? Why use debts? At that time, when we used loans to buy assets such as land or cash-generating power stations, so the debt burden could be borne.

And the government then injected RM1 million into the company, so that other government funds can be used to build schools, hospitals and so on. So the model can be leveraged and we can use government funds for other things.

But when we implemented projects by taking loans, what is important is the execution. It meant that the 1MDB’s plan was to carry out an IPO for the power generation company and secondly, to implement a master plan to develop its lands and break them into parcels for sale as well as to build infrastructure, for an example the Tun Razak Exchange. 1MDB will spend RM3 billion to upgrade Jalan Tun Razak to build infrastructure and direct connections to the highways – MEX, Smart and so on.

So all these activities were the responsibility shouldered and carried out by 1MDB. That was the 1MDB’s plan from the beginning. But after several years, various allegations were hurled against it, the critics and so on definitely complicated plans to run the IPO or sometimes even to sell land was difficult.

That’s where the mismatch was, an imbalance between incoming cash flow, the cash required to pay the debts. At that time, the government decided to implement a strategic review and after that a rationalisation plan to correct the situation as the original proposal could not be fully implemented. So we need to handle the matter through the rationalisation plan.

QUESTION: Is there a need for a business model like 1MDB in Malaysia and is there a duplication in the role played by 1MDB and Khazanah Nasional Bhd. Can you explain?

ANSWER: Basically both companies are complimentary, it means they support each other. If we were to see Khazanah Nasional, it has successfully managed government assets such as Tenaga Nasional Bhd, Telekom and others.

The government shares were transferred to Khazanah Nasional which also implements several new projects, including in Iskandar and so on. On the other hand, 1MDB carry out greenfield projects such as the takeover of land in TRX which used to have a hawkers market, a temple, a mosque and squatters.

As for Bandar Malaysia, it still has an air base there, so 1MDB has the responsibility to build eight new camps, namely six for the Defence Ministry and two more for the Home Ministry in several parts of the country at the cost of RM2.7 billion, so 1MDB has to develop them from scratch. There is nothing there and we have to develop the area which is different from the role played by Khazanah.

QUESTION: Tell us your vision of where you are taking 1MDB in the face of negative remarks and wild accusations.

ANSWER: I understand why the comments and criticisms were leveled against 1MDB, but we have the facts. My responsibility is to provide the facts on 1MDB so that the wrong assumptions can be corrected and we have been doing that. More than 48 press releases had already been dished out by 1MDB, a lot of information and facts were uploaded on our website, Facebook and Twitter and so forth in our strive to paint the correct picture on what is being done by us.

As we can see, 1MDB is among the biggest power companies in Malaysia, but that is not what we see. Unlike this table than can be pounded, electricity cannot be seen, and the same goes for TRX and Bandar Malaysia. When we look at the (Sungai Besi) air base and Bandar Malaysia, it looks as if there is nothing there, but as I mentioned earlier, 1MDB is building eight camps throughout the country and the project is in progress and will completed by the end of 2016.

It takes time and expenditure and so on, it’s 1MDB’s responsibility. Just like TRX, we are spending RM3 billion for infrastructure in TRX, but the infrastructure is not visible now as it is mostly below and so forth.

InsyaAllah, when we completed the infrastructure, the buildings will rise from there. Developing land to build new power stations will take time and it is something that cannot be seen physically or openly, but will materialise soon.

QUESTION: Most of 1MDB board members have outstanding business track records. Why then 1MDB is saddled with unwarranted remarks on its business performance? From your evaluation, what can you perceive on the company’s corporate governance before you took over the helm?

ANSWER: So, first of all, what is important for us is to find out what is 1MDB’s real problem. The real problem is cash flow which is mismatched. We have long-term assets that need to be developed overtime, but the cash flow coming our way should be used to pay debts as the problem was due to mismatch and liquidity, financial liquidity.

On governance, if we were to look back at several things that needed to be done, but for every decision made, what is important is that decisions were made correctly in the proper business context as well as in the context of time, which is also important.

When we looked back there were things that could have been done in other ways. So, at the time the decisions were made the context should be seen, and also whether all requirements were taken into consideration in coming to the decisions, and to me, they had been done that way.

In business, it’s different, there are plans implemented that failed due to internal or external factors. So what is important is that when we look at the challenges, we need to take action, if something was not done according to the requirements, it needs to be corrected and hence, we have the rationalisation plan at this juncture.

Q: You said earlier that 48 press releases have been issued and you have appeared on TV3 many times. Are you satisfied with the explanations, which on social media don’t seem too clear?

A: We are still making improvements on this matter. We are always improving and trying to make it better for ourselves. So for me, every time we issue an explanation or issue a press release, it helps us to give a clearer, truer and complete picture on 1MDB.

But the reality is, 1MDB is a complex and large company with about RM50 billion in assets, and it has other subsidiaries, and many transactions are done every day. We are also not listed on Bursa Malaysia. If there’s a need to come up with an explanation, we try to achieve a balance between carrying out our daily business and giving the explanation.

But to me, for most of the very critical questions that need answers, it is better investigations are carried out, because some are just accusations. Not many people are interested in the fact that the Cabinet has asked the Auditor General to investigate 1MDB.

So the process has come up with an interim report to the PAC, and to me the report is so complete, detailed and done professionally. So the answers we have given and in future will come from the ongoing investigations.

Q: Unfortunately, some of the investigations are still internal in nature and cannot be divulged to the public. In your opinion, what more can be done so that 1MDB can repay its debts in the time allotted?

A: The issue of debt repayment is the reason for the rationalisation plan, and as we are a company, the original plan was to buy land, an IPO and so on.

For now, the original plan cannot be implemented. So for this rationalisation plan, if the company has a liquidity problem or cash flow mismatch, there are really just three solutions.

The first is getting new funds from shareholders, or issue new equities. Secondly, we sell assets and repay the debts. And thirdly, we invite new funds from new investors. But for 1MDB we take the third approach.

So EDRA Energy is in the process of joining several local and international companies to buy some of the shares owned by 1MDB in the company. The money obtained will be used to settle the debts.

The value of EDRA is estimated at between RM16 billion and RM20 billion. Insyaallah (God willing), we will be able to repay the debts when we sell part of the company.

Secondly, in June 1MDB signed a township agreement with IPIC of Abu Dhabi. IPIC, a company owned by the Abu Dhabi government, is valued at US$60 billion. And the township is for IPIC to take over 1MDB’s debts, which actually have bveen guaranteed by IPIC. The principal and debts come to about US$3.5 billion. IPIC has also paid US$1 billion which we have used towards the debt settlement.

So if we exchange our assets with IPIC, 1MDB’s debt burden will be reduced by RM16 billion to RM17 billion.

Thirdly, 1MDB is in the process of bringing in development partners to Bandar Malaysia. The process is being implemented with about 40 companies which have shown inteterest in becoming development partners for Bandar Malaysia.

To me, if Bandar Malaysia is sold at RM550 to RM600 per square foot, its value would be between RM11 billion and RM12 billion.

If we combine the three, they will become proceeds towards debt settlement, and the three processes are proceeding smoothly, but it will take about four to six months to complete.

Q: 1MDB’s business model needs a high degree of confidence from lenders, companies that will help us generate capital. How is investors’ confidence, amid negative talk about 1MDB? Are we sure the ongoing process will be continued?

A: Alhamdullillah (praise be to God), 1MDB’s assets are fundamentally strong. Their strong fundamentals have given the investors confidence. They are focusing on the fundamentals. For example, the revenue from EDRA is about RM5 billion a year from energy, that will bring value to the company.

The Bandar Malaysia land is in KL. There is no land of such size near KLCC and the KL city centre, that’s the only land available. We add to the high speed terminal there two, or potentially three, MRT lines, the KTM Komuter and so on. The value of the land is not constrained by current prices.

What that means is, the opportunity is immense, that’s why the investors are willing to discuss. Look at KL Sentral, KLCC, Mid Valley — now there are all sorts of development there, but when it was started the confidence was low. However, investors could see the long-term vision.

Q: How would IPIC (through acquiring EDRA’s assets) find the property developers to buy land in Malaysia? Is this a normal procedure, or, as some would say, a not so wise move?

A: 1MDB’s original plan when buying separate utility companies was to combine them into a bigger entity. The objective then, in 2012 and early 2013, was to implement an IPO.

For the TRX and Bandar Malaysia land, the original objective was to come up with a master plan, get planning approval, and put in the infrastructure and sell a small portion of the land.

Acquiring assets using the debts, and selling the assets, will bring in new funds. The funds will be used to repay the debts. The difference is caused by cash flow mismatch and liquidity concerns. We were forced to come up with a new plan, which is to bring the funds to strategic investors, but the long-term plan remains.

In business, there are always difficulties, but what is important is the need to overcome the challenges, that is my goal. My job is to resolve the issue. That is why I was brought into 1MDB.

Q: Are we still on track, or are we far off-target?

A: Not to me. For instance, with TRX, we are in the process of selling the TRX land as in the original plan: with the entry of Main Board-listed companies to buy 17 of the 70 acres in TRX; selling the land to the Mulia Group, a prominent Indonesian company; and recently, to Affin Bank, which wants to build its headquarters.

So the plan is ongoing. With the power plants, we are still ongoing — 5,000 Megawatts every day — the difference is whether we sell the shares through an IPO or sell to strategic investors. In the current market situation, it is probably better for us to sell to strategic investors.

Q: The PM has said 1MDB’s debts can be settled in six months. With the current global economic condition, and the value of the ringgit against the dollar, is six months a sufficient time period for the debts to be repaid?

A: I am confident the time period is sufficient, considering the condition of the company and market. Like what was said before about EDRA, we shortlist interested local and overseas investors. Just like for Bandar Malaysia, 40 prominent companies from Malaysia and from outside — China, Australia, Singapore and the Middle East — are interested in buying the land.

These assets are long-term assets. We cannot look at it just from the current perspective, as they will take a long time. These companies understand we cannot take a short-term view but rather a long-term view.

Like I said, 1MDB’s assets are strong, and we can implement the rationalisation plan to solve this cash flow problem.

Q: In discharging your daily duties as President and Executive Director of 1MDB, do you faced any interference or are you given the freedom to make decision involving and affecting the direction of the company?

A: Corporate governance has several sections. As the management, we have a board of directors, shareholders. So, decisions must (be made) through or by using the stipulated methods of governance. Alhamdulillah (All praises be to Allah), for 1MDB, every major decision we made, either strategic review or rationalisation plan, is through the three segments. We collaborate and work together as a team. So, from the shareholders’ perspective, the Finance Ministry, board of directors and management are always collaborating and exchanging ideas for the implementation of team rationalisation plan.

Q: So, there is no interference?

A: Not of outside of that. We debate and discuss. For me, that is not interference, that is just the way for corporate governance, through the management of the board of directors and shareholders.

Q: About debt and settlement of debt, at the end of the day, will 1MDB be able to generate profit or will all income generated now be sufficient only to settle the debt and that no profits could be made by 1MDB?

A: We have two situations. Firstly, the current challenge is to settle the debt, which has two segments, namely interest and principal. The issue of ‘cash flow mismatch’ is the most important matter at this moment as we need to settle the debt to bring the company back to a stable position. That is our priority right now.

In the long term, if we can reduce the company’s burden of debt and bring it back to a stable level, by settling the debt using the company’s operating income, InsyaAllah (God willing), we will gain profit through the two (segments) which should be looked in a comprehensive manner. What matters most is that we must stabilise the situation in order to move forward.

Q: How do you plan to stabilise the situation with the current perceptions?

A: It’s difficult and the pressure is high, but we have plan and that plan is implementable, it’s a very realistic plan. For me and the 1MDB team, I always remind them to focus on the plan, no matter what the allegations or criticisms hurled at us. That’s normal in business and we have to accept that. The people have the right to voice out their opinion and if we can learn something from them, we have to take it into consideration and use it further develop the company.

Q: On the depreciation of ringgit, what action will 1MDB take to prevent its external debts denominated in the US dollar from continuing to burden the company? Is there any specific plan to address the problem?

A: There are two parts. Firstly, 1MDB has power companies in foreign countries, such as in Bangladesh and Egypt, and 1MDB is the largest independent power producer in both countries.

Besides, we also have power assets in Abu Dhabi and Pakistan, which are generating funds in the form of US dollars. This means that we have natural hedge for which cash flow is accepted in US dollars to pay off debts in US dollars.

Secondly, 1MDB also has various assets in the form of US dollars that could be pledged against the US dollars.

Q: When you sit down with reporter, you will definitely be asked unexpected questions. I want to know the sentiment of questions asked by investors interested in the TRX land, Bandar Malaysia and IPP. What is the sentiment and the costs that had to be borne, in terms of energy and arguments to convince the investors that their investment in 1MDB is a safe investment.

A: We look at the opportunity to invest, the questions are not just on the fundamental assets, but also on political allegations which are worrying the investors, for when we invest our money in certain project, of course the economic or political situation became an important matter for the implementation.

The method that we use is to show them the plans for our power companies and land for the long term, maybe 15 or 20 years from now, and investors will understand that from time to time, there will be some political and economic issues.

We see how Malaysia had gone through a number of challenges in the past 20 or 30 years, but the graph is going up and we have to remember that although, right now, there are concerns and worries about some issues, if proper steps are taken, eventually the situation will improve.

Q: So you are suggesting that the investors are not too upset with existing sentiment in the country after looking into the company’s long-term plan?

A: Yes.

Q: Regarding the Public Accounts Committee’s (PAC) investigation which is still pending following the appointment of PAC members as part of the new Cabinet line up, how far the 1MDB is willing to tell the truth about the transactions and what happened in the company?

A: In 1MDB, not only the PAC. 1MDB is open to various investigations, from most investigation companies in Malaysia, from Bank Negara, MACC, PDRM, A-G, Auditor-General and the PAC, and each investigation is still ongoing and never stop, and we always give the required information to facilitate the investigations.

With PAC, we were ready to go to their office on Aug 4 to 6, but because of the changes taking place at the PAC, the meeting was postponed. We are prepared to go back to the PAC, if a new date is set, to present our facts.

The postponement has also made it difficult for us because as 1MDB, we really want to answer some questions and counter the allegations made against us, but when the meeting was postponed, we did not get that opportunity.

PAC, in my view, is the right institution. The best of all investigations to present, because there are opposition and the government. That means the questions that we will be asked are from both parties and it is our responsibility to convince not only the government, but also the opposition.

That is important.

Q: So, the joke made by members of the public and certain quarters that 1MDB would feel so relieved with the postponement is actually not true because you are ready to face the PAC?

A: It is indeed not true because my friends and I, including the board of directors, are all set to face the PAC.

Q: In your opinion Mr Arul, how comprehensive the investigations carried out by the PAC, Auditor General and the likes will be, taking into account the aspects of the allegations, which are not limited to 1MDB account?

A: For me, the investigations are being carried out so thoroughly as the Bank Negara has to look at the overall picture. PDRM, for example, with the several police report made against 1MDB, has been looking in detail into the reports and the same goes with the MACC. Each department has their own specialty in carrying out the investigations, not only on the accounts scrutinised by the Audit Department, but files and computers have also been taken from 1MDB, and that are not limited to the answers that were already given.

Q: How about the connection of certain individuals with some political leaders in country? Can it be investigated and is it under the jurisdiction of the investigating agencies?

A: To me, every investigating agency is doing their job in a professional and comprehensive manner. It is their right to carry out their duties and as a professional, I have also discharged my duties to the best of my abilities and Prime Minister (Datuk Seri Najib Tun Razak) has stated publicly that if any wrongdoing was found, action will be taken. Now, it is up to the agency to carry out the investigations in a comprehensive and professional manner.

Q: Mr. Arul, let say something bad happens, like the rationalisation process did not run smoothly and the debts could not be settled within the stipulated time, will it affect the country’s economy?

A: That is an important question as the government has provided a guarantee for RM5.8 billion of 1MDB’s debt, and there is also a letter of support for RM11.5 billion, so it’s important for us to implement the rationalisation plan so we can settle the debts and not burden the government. Alhamdulillah, 1MDB assets are strong and currently, there are investors who have shown interest to purchase the assets at market prices. To us, the rationalisation plan is clear, for us to solve debt issues, but if for any reason it was not happening, we need to remember about companies such as Edra Energy, that we have other options which may be sold one by one. So, with such strong assets, our options are many and we can take reasonable time, as long as the principal and interest, for the debts can be settled.

Q: In a nutshell, are you confident and optimistic to lead the 1MDB out of this negative episode to become a company that can really made the nation proud?

A: To me, what is important is that the investigations must continue, the truth and the facts must be made public by the independent investigators. Don’t take our word on it in a transparent and professional manner. That is more important. It is not my duties to find fault, it is the responsibility of the investigating agencies. My responsibility is to settle the debts that are burdening the company.

With the support of 1MDB staff and shareholders, Ministry of Finance, InsyaAllah (God willing), we will be able to settle the debts. Overall, it looks good, for the future is clear. I’m confident, that’s why I’m here today. I returned to Malaysia to do my job.


Published in: on August 13, 2015 at 23:00  Comments (9)  

Big Brother is Watching!

The Singapore Government is reported to use spyware to go into its citizens’ computers and copy files, record Skype calls, read e mails, messages and access to password, all in the name of ‘national interests’.

Digital News Asia story:

Singapore is using spyware, and its citizens can’t complain

By Gabey GohAug 03, 2015
Leaked Hacking Team documents lists industry regulator IDA as a customer
Citizens have no rights to privacy, but Govt concerned about public trust

THE Singapore Government is using spyware that can copy files from your hard disk; record your Skype calls, e-mails, instant messages and passwords; and even turn on your webcam remotely – and if you’re Singaporean, you have no constitutional right to complain.

Yes, that’s right – the Singapore Constitution does not include a right to privacy. In addition, because of various pieces of legislation including the Criminal Procedure Code (amended in 2012) and the Computer Misuse and Cybersecurity Act (amended in 1997), the Government does not need prior judicial authorisation to conduct any surveillance interception.

Indeed, the regulatory structure governing the surveillance of citizens is very much controlled by the Executive branch, with little judicial oversight, according to Eugene Tan, assistant professor with the School of Law at the Singapore Management University (SMU).

“I would say that we are in a state of affairs in which very little is known about what the Government conducts surveillance on, how it does it, and the regulatory controls in place.

“The courts have placed a lot of premium on the Executive’s assessment of what national security requires,” he told Digital News Asia (DNA) via email.

The use of surveillance tools – or spyware – by nation-states was brought to the forefront again in July after Italian spyware maker Hacking Team was hacked, and information on its business released on the Internet.

The leak of 300GB worth of data offered a look inside a segment of the security industry that is typically hidden in secrecy.

Disclosed documents showed that Hacking Team had 70 current customers, mostly military, police, federal and provincial governments across the world, and that it had recorded revenue above €40 million (US$44.5 million).

Three Malaysian government entities were named in these records: The Malaysia (sic) AntiCorruption Commission, the Prime Minister (sic) Office and an unknown entity known only as Malaysia Intelligene (sic).

The Infocomm Development Authority of Singapore (IDA) was also listed as a current customer, after it renewed its maintenance contract with Hacking Team for the company’s Remote Control System software in February.

Malaysian civil liberties lawyer Syahredzan Johan told DNA that if it were indeed true that the Malaysian Government was spying on its people, “then major violations of our fundamental liberties would have taken place.”

“Article 5 of the Federal Constitution provides that all persons have the right to life and personal liberty. Personal liberty here includes the right to privacy, as recognised by the Federal Court,” he said.

“So the law recognises the right to privacy. Spying on citizens is a violation to this right to privacy. As such, it contravenes Article 5 of the Federal Constitution,” he added.

The colonial context

Singapore, however, does not afford its citizens such rights. Tan told DNA that the regulatory regime in Singapore was geared towards concerns of national security from the outset.

“So matters like judicial authorisation and where the constitutional rights fit in were probably not incorporated from the start.

“We must remember that we inherited the colonial British apparatus in internal security matters, and so rights did not feature prominently,” he said.

However, Tan said that beyond legal controls, the Government is mindful that any improper use of surveillance apparatus and internal security laws would result in a massive loss of public confidence.

“So this abiding need to maintain the legitimacy, trust and confidence is foremost. It would be accurate to say that the regulatory regime in Singapore is [guided] by non-legal restraints like maintaining public confidence, rather than a reliance on legal mechanisms.

“In short, [it’s] a very different approach altogether from what we see in other liberal democratic controls,” he said.

Depth of surveillance unknown

In its June 2015 report entitled The Right to Privacy in Singapore: Stakeholder Report Universal Periodic Review 24th Session, Privacy International said that despite some evidence from security researchers, details of the capacity of the Singaporean Government to conduct surveillance and the scope of its surveillance infrastructure remain unknown.

Privacy International is a human rights organisation that works to advance and promote the right to privacy around the world.

“Yet, it is widely acknowledged that Singapore has a well-established, centrally-controlled technological surveillance system designed to maintain social order and protect national interest and national security,” the report said.

The surveillance structure in Singapore spreads wide from CCTVs (closed-circuit televisions), drones, Internet monitoring, access to communications data, mandatory SIM card registration, identification required for registration to certain websites, and the use of big data analytics for governance initiatives including traffic monitoring.

[Download the full Privacy International report here.]

In 2013, Citizen Lab of the University of Toronto found evidence that PacketShaper, produced by the US-based security firm Blue Coat Systems Inc, was in use in Singapore.

PacketShaper allows the surveillance and monitoring of user interactions on various applications such as Facebook, Twitter, Google Mail, and Skype.

Citizen Lab also found command and control servers for FinSpy backdoors, part of Gamma International’s FinFisher “remote monitoring solution,” in a total of 25 countries, including Singapore.

FinSpy is malware – a software program that gives its operator the ability to observe and control an individual’s computer or mobile device – produced by British-German company Gamma International.

However, the Singapore Government has denied using spy software.

Lack of concern

Asked about how the general Singaporean population felt about the carte blanche permission the Government has when it comes to surveillance, SMU’s Tan said it perhaps is a case of “ignorance is bliss.”

“There is implicit trust that surveillance is specifically for security concerns alone, and that there is no mass surveillance.

“Most of the time, people don’t think about these things. But all it takes is for one scandal to occur and the state of play will be very different,” he added.

Asked about what controls there were to prevent the use of private surveillance industry products to facilitate human rights abuses by the Government, Tan said he was not aware of any such controls in place.

“But the Singapore Government treads very carefully to ensure that it stays within the law and does not run afoul of its human rights obligations,” he said.

“And where there is use of third-party products, I believe the controls are robust, particularly with what information and surveillance data is provided to or obtainable by private vendors and how they are used,” he said.

Some laws in Singapore regulate the processing of personal data, including in the public sector, such as the Computer Misuse and Cybersecurity Act which criminalises unauthorised access to data. However, they do not regulate or address the lawful collection of data.

Other safeguards for privacy and personal data are included in the Official Secrets Act, the Statistics Act, the Statutory Bodies and Government Companies (Protection of Secrecy) Act, and the Electronic Transactions Act.

Laws that regulate data held by private sector entities include the Personal Data Protection Act, the Banking Act, and the Telecommunications Act; whilst other relevant legislation include the law of confidence, which addresses misuse and publication of confidential information.

Tan said that judicial review could be one mechanism by which concerned citizens could challenge the Government’s decisions and actions.

“But the difficulty is always obtaining evidence that one has been ‘surveilled’ indiscriminately or for unlawful purposes,” he said.

Refusal to ratify international covenant

The Privacy International report also noted that Singapore has not ratified the International Covenant on Civil and Political Rights (ICCPR).

Article 17 of the ICCPR provides that “no one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence, nor to unlawful attacks on his honour and reputation.”

“This raises significant concerns in light of the fact that the legal framework regulating interception of communication falls short of applicable international human rights standards, and judicial authorisation is sidelined and democratic oversight is non-existent,” the Privacy International report said.

Tan said that Singapore has not indicated any intention to sign the ICCPR.

“But the Government here is conscious of the need to do right – especially by the law. So while the regulatory regime is relatively opaque, there are probably internal controls to ensure proper use of the extensive powers of surveillance,” he said.

But Tan also argued that the first challenge is to recognise that there is a need for a regulatory regime that is not centred exclusively on the Executive. This recognition is particularly relevant to the Government.

“Once there is this recognition, then there would be a need to consider the type of regulatory regime,” he said.

“In the Singapore context, we can be sure that the Government would rather [have] a regime that grants it generous latitude about how it conducts surveillance and the broad liberty to exercise discretion in making such decisions.

“A third challenge is the need for civil society to meaningfully engage the Government without the Government being concerned that a more robust regime would curb its operational effectiveness and efficacy – while ensuring that the maintenance of national security does not result in abuses of rights,” he added.

– See more at:


If this report is true, see how the people just across from the southern-most city on continent Asia is dealing with getting tough on their own netizens.

The Singapore Government is very determined that the national interest supersede anything else.

Yesterday, Prime Minister Dato’ Sri Mohd. Najib Tun Razak urged the Malaysian Communication and Multimedia Commission to get tough on those who abuse, misuse and adulterate social media platforms for sinister purposes which could destabilise the nation.

Considering that the Prime Minister personally has been demonised and major Federal Government ministries, agencies and commissions have been under constant attack, the strike against the abusers, misusers, hackers and habitual liars within the cybersphere should contained and reprimanded a long time ago.

Published in: on August 3, 2015 at 15:00  Comments (18)  

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